ChoicePoint still paying...a hefty price for not protecting data

Reckoning Day for ChoicePoint...

You may remember when Choicepoint, the data aggregator and vendor of personally identifiable information fell prey to a very simple ploy. Some Nigerian data thieves became customers and proceeded to download thousands of records. ChoicePoint is finally settling a class action law suit that arose from that incident almost four years ago.

The price tag is $10 million. Ouch.

The lesson is obvious: you have to think through all possible scenarios when making critical data available to your customers including what should be obvious - that your customers may be crooks. There are deeper questions though. The credit bureau's and ChoicePoint ( a spin off from one of the bureaus, Equifax) have created a world where credit histories can be used to open new accounts with credit card issuers, apply for loans, and rent apartments. If it were not for them thieves would have no reason to want to steal Social Security numbers and credit reports.

The real culprit is actually ChoicePoint itself and the three bureaus. MORE
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The company earlier paid $15 million in civil and consumer penalties to the Federal Trade Commission and agreed to tighten its security procedures and submit to random audits to ensure it was properly protecting personal information.

It coughed up another $500,000 to settle lawsuits brought by the Attorneys General of 44 states for its lax handling of personal data that led to the breach. See much more on ChoicePoint at ConsumerAffairs.com