By Bob Sullivan Technology correspondent
msnbc.com
updated 2/14/2005 6:38:46 PM ET 2005-02-14T23:38:46

Criminals posing as legitimate businesses have accessed critical personal data stored by ChoicePoint Inc., a firm that maintains databases of background information on virtually every U.S. citizen, MSNBC.com has learned.

The incident involves a wide swath of consumer data, including names, addresses, Social Security numbers, credit reports and other information. ChoicePoint aggregates and sells such personal information to government agencies and private companies.

Last week, the company notified between 30,000 and 35,000 consumers in California that their personal data may have been accessed by "unauthorized third parties," according to ChoicePoint spokesman James Lee.

California law requires firms to disclose such incidents to the state's consumers when they are discovered. It is the only state with such a requirement but such data thefts are rarely limited to a single geographic area.

Lee said law enforcement officials have so far advised the firm that only Californians need to be notified.

"The only incident that has been confirmed is in California," he said.

ChoicePoint maintains a dossier on virtually every American consumer, according to Daniel J. Solove, George Washington University professor and author of "The Digital Person."

The Atlanta-based company says it has 10 billion records on individuals and businesses, and sells data to 40 percent of the nation's top 1,000 companies. It also has contracts with 35 government agencies, including several law enforcement agencies.

Victims told months after the fact
The incident was discovered in October, when ChoicePoint was contacted by a law enforcement agency investigating an identity theft crime. In that incident, suspects had posed as a ChoicePoint client to gain access to the firm's rich consumer databases.

Video: Personal data exposed Subsequent research by ChoicePoint revealed that about 50 fake companies had been set up and then registered with ChoicePoint to access consumer data. 

California consumers who received warning letters from the firm last week were "in some way connected to searches" conducted by those fake accounts, Lee said.

The firm was only given clearance by law enforcement officials to disclose the incident two weeks ago, Lee said

While the criminals had access to ChoicePoint data, it's not clear what, if any, information was stolen, said Chuck Jones, another ChoicePoint spokesman. The letters were sent as a precaution, he said.

The FBI, Los Angeles County Sheriff's Office, and the U.S. Postal Inspector's Office are investigating, he said.

Consumer frustrated by notification
The letter urges consumers to check their credit reports for suspicious activity.

"We believe that several individuals, posing as legitimate business customers, recently committed fraud by claiming to have a lawful purpose for accessing information about individuals," it reads. "You should continue to check your credit reports frequently for the next year."

The two-page letter offers details on how to spot fraud, but no additional information about the incident, or what information may have actually been stolen.

"ChoicePoint has apologized for any inconvenience this incident may cause," said ChoicePoint spokesman Chuck Jones.  "But ChoicePoint has no way of knowing whether anyone's personal information actually has been accessed," or used to commit identity theft, he added.

California consumer Elizabeth Rosen, who received the ChoicePoint letter Friday, was upset that the company only provided sketchy details about the incident to her.

"They gave a toll free number to call, but when I called, the person just read from a script ... they said disclosing too many details may hurt an ongoing investigation," Rosen said. "I'm not happy about this. I didn't even know who ChoicePoint was."

That reaction is common, according to Solove.

"Even though you might not have heard of ChoicePoint, they've heard of you. They are playing a role in your people's lives whether they know it or not," he said.

Privacy consultant Larry Ponemon, who operates the Ponemon Institute, said he was surprised criminals were able to pose as ChoicePoint clients.

"What really concerns me is when low-tech methods are used to gain access, than you really have problems," said. "Obviously this is very surprising, given that they are in the data business."

Jones said ChoicePoint had adjusted its procedures to "help protect against a repeat" of the incident.

Bob Sullivan is the author of  Your Evil Twin: Behind the Identity Theft Epidemic.

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