Fraud Ring Taps Into Credit Data

ChoicePoint Inc. said Tuesday that it had begun sending letters to about 35,000 California residents to tell them that their personal information may have been compromised. The Georgia company urged them to check their credit reports for new accounts or suspicious activity.

The scope of the scam is likely to widen because California is the only state that requires companies to notify people when the security of their personal information is jeopardized.

A ChoicePoint spokesman said the number of victims nationwide could total 100,000, but the company could not be sure of the extent of the fraud and had no plans to contact people outside California.

"This is the worst in our seven years," said the spokesman, James Lee. "This is extraordinarily serious."

Los Angeles County sheriff's investigators said they had identified 750 people whose personal data had been used to buy jewelry, consumer electronics and computers. A North Hollywood man has been arrested, and investigators are searching for other suspects.

Fewer than 10,000 credit reports were obtained in the yearlong scam, Lee said. He refused to explain how the scammers circumvented rules that require permission from the subject of a credit report to release the data to a third party.

"Financial fraud is a pervasive part of our economy," Lee said. "The bad guys are very bright, very smart and very committed."

Although not a household name, ChoicePoint maintains what it claims is the largest collection of court records, addresses and other public data on people in the country -- some 19 billion records in all.

Insurance companies, banks, law enforcement agencies and many arms of the federal government use ChoicePoint's data. Landlords rely on ChoicePoint's databases to make decisions about prospective renters and insurance companies use them to assess the risk of potential customers.

Last year, the company earned $148 million on revenue of $919 million.

Spun off from credit bureau Equifax Inc. in 1997, ChoicePoint has been criticized by privacy advocates for not maintaining tighter control over the data it compiles and sells.