Firms Hit by ID Theft Find Way to Cash In on Victims
Elizabeth Rosen was plenty angry when ChoicePoint Inc. sent her a form letter acknowledging that crooks might have perused some of her most sensitive personal and financial data.
But the Hollywood nurse was flabbergasted when the company, one of the nation's largest collectors of consumer records, also offered to sell her some of the same information so she could see what might have been compromised.
Rosen was among the 150,000 people whose records were released to identity thieves who scammed their way into ChoicePoint's databases, which the company says constitute the largest private collection of court records, Social Security numbers and other public and personal data in the country.
Insurance companies, banks, law enforcement agencies and many arms of federal and local governments buy information from ChoicePoint to perform background checks on potential clients, tenants or employees. Now the Alpharetta, Ga., firm is finding a lucrative new business charging consumers worried about identity theft for access to their own criminal, education and employment histories.
"They sold information on me to criminals," Rosen said, "but they're not sharing it with me."
Rosen's experience highlights a paradox in the recent string of thefts of personal information: Many of the same companies responsible for safeguarding reams of sensitive data that have fallen into the hands of scammers are now trying to cash in by pledging to protect consumers' privacy.
Information brokers infiltrated by con artists, banks that have lost unencrypted financial data and peddlers of online background checks are pitching fraud-detection plans that cost from $25 a year to more than $150.
The companies offering these services say they provide real value. But victims of identity theft and consumer advocates complain that ChoicePoint, the major credit bureaus and others are reaping the benefits of their own lapses and, in some cases, recklessness. They say there's little incentive for sellers of personal data to tighten security when they profit from people worried that they'll be among the 10 million annual victims of identity theft.
Critics such as Gail Hillebrand, an attorney for Consumers Union, which publishes Consumer Reports magazine, contend that the data brokers and banks fuel identity theft by marketing all manner of information and by offering easy credit without screening applicants to ensure that they are who they say.
