ChoicePoint Had Earlier Data Leak

Two Nigerian-born fraud artists were arrested in Los Angeles in 2002 by federal officials who charged that the pair used ChoicePoint to gain access to confidential information about at least 7,000 people and possibly many more, resulting in at least $1 million in losses.

That security breach, which received no public attention at the time, is similar to the case in which a North Hollywood man, also a Nigerian native, pleaded no contest last month to felony identity theft. He had obtained as many as 145,000 ChoicePoint records by setting up a fake business claiming to have a legitimate need for the information.

The most recent incident came to light because of a new California law that requires credit agencies to notify victims of identity theft.

ChoicePoint executives on Tuesday declined to comment.

Consumer advocates said they were outraged.

ChoicePoint "tried to suggest there really wasn't a problem" after the recent case became public, said Marc Rotenberg, executive director of the Electronic Privacy Information Center. "This makes it clear they had been aware of earlier problems with the wrongful sale of their information to criminals."

Consumers Union attorney Gail Hillebrand, who was attending a state meeting on identity theft convened Tuesday by Gov. Arnold Schwarzenegger, called the earlier case an "illustration that you can't rely on companies with a business incentive to distribute information to restrict that access."

ChoicePoint records, which can include credit reports, addresses and Social Security numbers, are invaluable to identity thieves, who use the information to open fraudulent accounts.

The recent ChoicePoint case came to light because Atlanta-based ChoicePoint was forced to notify 35,000 Californians -- in accordance with the law -- that their records might have been compromised.

After angry officials nationwide called for wider disclosure, the company sent notifications to an additional 110,000 people. Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) said he would hold hearings on identity theft.

California Sen. Dianne Feinstein (D-Calif.) said Tuesday that the discovery of the previous case gave ammunition to proponents -- including her -- of a national disclosure law.