ChoicePoint Sued Over Identity Theft [View All]

[NashVegas]

LOS ANGELES (Reuters) - A California woman has sued ChoicePoint Inc. (CPS.N: Quote, Profile, Research) for fraud and negligence after criminals gained access to a database of personal records compiled by the company.

The suit, which seeks class-action status, was filed in Los Angeles Superior Court last Friday and claims that for at least five months the company failed to adequately protect people's financial records and confidential information.

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http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-02-23T172648Z_01_N23621931_RTRIDST_0_BUSINESS-FINANCIAL-CHOICEPOINT-DC.XML

Before anyone gets excited, look at what Wired reported this morning:

Legal experts say that people who suffered losses as a result of the breach will find it difficult to get compensation from ChoicePoint for selling their personal data to con artists, even if the victims can prove that ChoicePoint was negligent in screening customers who purchased their data. That's because courts have been unwilling to penalize companies when victims of identity theft are not their direct customers.

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This strikes an ironic chord for privacy advocate Richard M. Smith, who noted that the company's inability to verify and authenticate the identities of its own customers led to the recent breach in which scam artists illegally purchased consumer data from the company and stole the identities of more than 700 people.

Last October, ChoicePoint uncovered suspicious activity during an audit and contacted law enforcement agents to determine if it was fraud-related.

An investigation revealed that unknown perpetrators had used stolen identities to open 50 customer accounts with ChoicePoint to purchase data on at least 145,000 individuals. They purchased data for more than a year before ChoicePoint discovered the fraud.

http://wired.com/news/privacy/0,1848,66685,00.html?tw=wn_tophead_1