SEATTLE – Attorney General Rob McKenna today announced a multistate settlement with ChoicePoint that resolves allegations the company failed to adequately maintain the privacy and security of consumers’ personally identifiable information. The settlement with attorneys general of 43 states and the District of Columbia stems from a 2005 data breach that compromised personal financial records of more than 163,000 consumers, including an estimated 3,000 Washington residents.
“As part of the settlement, ChoicePoint will make significant changes to the way the company screens new customers,” McKenna said. “New credentialing methods requested by attorneys general, along with improvements required by a settlement with the Federal Trade Commission, will help ensure that sensitive data is better protected and shared with only legitimate businesses, not identity thieves.”
. The agreement represents the first time a data broker has agreed to safeguard publicly available information in the same way as financial information that is protected by law. The Washington Attorney General’s Office sent the Assurance of Voluntary Compliance today to Thurston County Superior Court. A judge must approve the agreement before it becomes final.
ChoicePoint, based in suburban Atlanta, Ga., collects, maintains, and sells personally identifiable information about consumers, including names, Social Security numbers, and birth dates, employment information, and credit histories. The company provides credential verification services to more than 50,000 businesses, government agencies and non-profit organizations.
In February 2005, ChoicePoint announced that criminals posing as legitimate businesses gained access to consumers’ personally identifiable information. At the time the theft was detected, California was the only state that required companies to notify consumers of such incidents. ChoicePoint used that law as a guide to mail notices to consumers across the country whose information may have been acquired by the thieves. Washington’s Legislature passed a similar data breach notification law that went into effect in July 2005.
In January 2006, ChoicePoint settled a case with the Federal Trade Commission and paid $10 million in civil penalties and $5 million into a pool to be used for consumer redress. The FTC settlement requires ChoicePoint to improve its process for accepting clients that obtain information from credit reports.
As a condition of today’s settlement with the states, ChoicePoint agreed to also improve its credentialing process for other clients who obtain Social Security numbers and personally sensitive information. ChoicePoint will also pay $500,000 to the states, which will likely be used for attorneys’ fees and costs.
In addition to Washington, states participating in the settlement include Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Virginia, West Virginia, Wisconsin and the District of Columbia.
With the assistance of law enforcement agencies, the Federal Trade Commission identified more than 1,400 consumers who may have experienced out-of-pocket expenses due to identity theft connected with the alleged security lapses at ChoicePoint. The FTC has mailed claims forms for reimbursement to those consumers. It is also possible that other consumers may be eligible for reimbursement for the following:
- Unauthorized charges on existing accounts NOT covered by bank or credit card company
- Money paid on new accounts opened in consumer’s name
- Money paid to a debt collector on new accounts opened in consumer’s name
- Cost of ordering new checks
- Cost to file or receive copy of police report
- Notary fees
- Costs associated with correcting unauthorized charges and/or disputing incorrect information – telephone calls; mail, fax, photocopy charges; hourly fees for Internet access; travel expenses.
Eligible consumers should submit a claim to the FTC by June 22, 2007. More information about the claims process is online at http://www.ftc.gov/bcp/conline/cases/choicepoint/index.shtm. Consumers can also request a claim form by calling (toll-free) 1-888-884-8772.
Media Contacts: Kristin Alexander, Seattle Media Relations Manager, (206) 464-6432
Shannon Smith, Assistant Attorney General, (206) 389-3996