Victims of the ChoicePoint identity theft scandal will soon be receiving claims forms to recover out-of-pocket expenses.
The Federal Trade Commission (FTC) mailed more than 1,400 of the forms Wednesday and made them available for download at the FTC ChoicePoint site. Restitution claims must be postmarked by Feb. 4.
The victims will be paid out of a $5 million fund established by ChoicePoint as part of its January settlement with the FTC. ChoicePoint also agreed to pay a $10 million fine for failing to adequately protect the consumer information in its databases.
The Georgia-based ChoicePoint is a credit report service used by more than 50,000 landlords and merchants to conduct background checks on potential tenants and customers. It also has several law enforcement and government agencies as clients.
In February 2005, ChoicePoint disclosed that an ID theft ring gained access to the company’s vital credit information. The breach involved more than 160,000 records.
In a complaint brought against ChoicePoint, the FCC said the company did not have reasonable procedures in place to screen prospective clients, turning over consumer personal data to customers whose applications raised obvious red flags.
The lax security practices cited by the FTC included approving customers who used commercial mail drops as business addresses, cell phone numbers as office numbers and accepting payments by money orders drawn on multiple issuers.
In at least one case, ChoicePoint continued to provide consumer reports for a customer whose account was repeatedly suspended for nonpayment.
In addition to financial penalties, the settlement required ChoicePoint to implement new procedures to ensure that it provides reports only to legitimate businesses for lawful purposes. The company also established a comprehensive information security program subject to third-party audits every other year until 2026.
ChoicePoint also hired Carol DiBattiste as the company’s chief credentialing, compliance and privacy officer. DiBattiste is a former senior law enforcement and security official in both the Clinton and Bush administrations.
Source: Internet New Bureau – By Roy Mark