Texas Attorney General's Settlement with ChoicePoint Protects Consumers' Private Information

Identity theft victims can seek reimbursement for security breach losses

May 31, 2007 -- AUSTIN – Texas Attorney General Greg Abbott today reached a settlement with ChoicePoint Inc., a Georgia-based data broker, which creates important safeguards for consumers’ sensitive personal and financial information. Under the agreement, which includes 43 other states, the victims of a widely reported 2005 security breach will be reimbursed for any identity theft-related losses they suffered.

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“Identity theft is one of the nation’s fastest growing criminal enterprises,” said Attorney General Abbott. “With businesses and consumers losing billions of dollars each year, law enforcement must aggressively crack down on identity theft. Texans can rest assured that the Office of Attorney General will work diligently to prevent identity theft and protect its victims.”

ChoicePoint provides information and credential verification services to businesses, government agencies and nonprofit organizations. The company routinely collects, maintains and distributes information about thousands of consumers. This data includes both personal financial information and publicly available information. In February 2005, criminals posing as legitimate business representatives breached ChoicePoint’s data system, potentially gaining access to personal information on about 145,000 people, including many Texans.

The settlement requires ChoicePoint to significantly change its new customer review and credentialing process to ensure that criminals access neither its system nor consumers’ sensitive personal information. The settlement marks the first time that a data broker has agreed to provide the same protections for both publicly available information and financial information that is protected by law.

Under a January 2006 settlement with the U.S. Federal Trade Commission, ChoicePoint established a $5 million reimbursement pool for consumers who suffered out of pocket identity theft losses in the wake of the data breach.

Today’s settlement ensures that qualified identity theft victims are eligible for reimbursement from ChoicePoint. Examples of reimbursable consumer losses include:

• Unauthorized charges on consumers’ pre-existing accounts that were not paid by banks or credit card companies;
• Charges on new accounts that were opened in the name of identity theft victims;
• Payments to debt collectors who were collecting on new accounts opened in the victims’ names;
• Costs of ordering new checks;
• Costs to file or receive copies of police reports;
• Notary fees;
• Costs associated with correcting unauthorized charges or disputing incorrect information, which can include telephone calls, faxes, travel expenses and hourly fees for Internet access.

The deadline to submit a redress claim form to the U.S. Federal Trade Commission for repayment from losses is June 22, 2007.

Eligible consumers must complete the form and submit it for consideration. More information can be found on the redress program at www.ftc.gov/bcp/conline/cases/choicepoint/index.shtm.

Source: Texas Attorney General