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FTC Finally Sets Up Redress For ChoicePoint Victims

By Martin H. Bosworth
ConsumerAffairs.com

December 7, 2006

ChoicePoint • Lexis-Nexis Parent To Buy ChoicePoint • ChoicePoint Settles Data Breach Lawsuit • More ChoicePoint Identity Theft Victims Identified • ChoicePoint Settles With Attorneys General Over Data Breach • FTC Finally Sets Up Redress For ChoicePoint Victims • ChoicePoint Names a "Consumer Advocate" • FTC Fails To Pay Victims Of ChoicePoint Data Breach • ChoicePoint Gets a Makeover • Data Blunders Cost ChoicePoint $15 Million • Guilty Plea in ChoicePoint Data Theft • ChoicePoint Finds More Cases Of Illegal Data Access • ChoicePoint Responds • PATRIOT Act Further Empowers ChoicePoint • Previous Data Thefts Went Unreported • Consumers Will Be Able to See Their ChoicePoint Records, Company Says • Nigerian Sentenced to Prison in ChoicePoint Theft • State Tally of ChoicePoint Victims • ChoicePoint Breach Worse Than First Reported • Is National Security Compromised by ID Theft? • States Demand ChoicePoint Notify ID Theft Victims • Private Information Stolen from Nationwide Consumer Database

Three months after the FTC was at least mildly embarrassed by its failure to disburse the $5 million settlement it won against ChoicePoint to affected consumers, the agency has finally begun to address claims brought in the wake of the agency's data breach.

The FTC has mailed out claim forms to 1,400 consumers who had to pay costs out of pocket related to the ChoicePoint breach. There's also a Web site -- www.ftc.gov/choicepoint -- for affected consumers to download the form and contact the FTC with questions, and a toll-free number (1-888-884-8772) has also been provided.

Reparation forms must be mailed in by Feb. 4, 2007 to be considered for a claim, the agency said.

ChoicePoint was forced to pony up $15 million to the FTC for letting Nigerian identity thieves get away with the personal information of 145,000 Americans.

The FTC settlement, $5 million of which was earmarked to cover consumers' losses from the breach, was the largest of its kind the agency has ever assessed.

But in September 2006, a year after the settlement, none of the victims had received any of the monies they were owed, and the FTC claimed it was still reviewing the process by which it would disburse the settlement. It wasn't until the FTC was bombarded by press coverage that it began moving ahead with the claims process.

ChoicePoint, for its part, has washed its hands of the matter. In an e-mail to ConsumerAffairs.com, assistant privacy officer Tammy Meckley said that, "We have no role in deciding who will receive the money or the criteria used by the FTC to distribute the money. "

Speaking to BusinessWeek, ChoicePoint exec Matt Furman said that he was pleased the FTC was moving forward and that the company would assist in any way possible.

ChoicePoint recently appointed longtime legal counsel Katherine Bryant as its first "consumer advocate," tasked to handle issues arising from the sale and sharing of the billions of consumer records by the Alpharetta, GA-based data broker.

The ChoicePoint data breach is generally considered the event that opened the floodgates to increasing public awareness of identity theft and data breaches.

The breach has led to reports on hundreds of other data incidents, calls for legislation to prevent data fraud at the federal and state level, and jail time for Olatunji Oluwatosin, the alleged culprit in the breach.

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