ALPHARETTA, Ga. — ChoicePoint Inc. was created to avoid just the sort of mess in which it now finds itself.
The nation's biggest private collector of personal information was spun off seven years ago from credit bureau Equifax Inc. largely to get around laws restricting the way such bureaus sell data.
Because it was not considered a financial services company, ChoicePoint was not subject to data laws, and for years the plan worked like a charm.
Freed from regulation, the company saw sales more than double -- and its profit and stock price more than quadruple -- as businesses demanded more data to manage risks and target marketing. ChoicePoint became the quintessential Information Age company, culling all manner of sensitive facts and figures about virtually every adult in the United States, some 19 billion records in all.
But in the wake of a security breach that allowed a ring of identity thieves to peruse tens of thousands of those records, ChoicePoint suddenly faces the sort of government oversight that it and similar companies have sought to avoid.
The Securities and Exchange Commission and other regulators are investigating ChoicePoint's practices. Last week, the Senate Banking Committee held the first in a series of congressional hearings. Legislators and industry experts predict new regulation of ChoicePoint and competing information brokers that compile and sell Social Security numbers, driver's license numbers and financial histories to tens of thousands of customers, including lenders, landlords and many of the Fortune 500.
"It's very unfortunate," said former ChoicePoint Vice President Catherine Aldrich. "They are a victim of a really heinous crime, and they are going to be really penalized -- the whole industry is."
Privacy advocates disagree, saying ChoicePoint brought the prospect of more vigorous regulation on itself with an aggressive push to find new customers. They note that the recent breach was only the most widely publicized and that ChoicePoint has erred before -- as during the 2000 election, when it was hired by the state of Florida to run background checks on voters.
Chief Executive Derek V. Smith and other company officers declined repeated interview requests, as did company directors.
In regulatory filings and news releases, though, the company has said it is cracking down on potential identity thieves by turning away some customers, giving up a projected $15 million to $20 million in annual revenue. Last year, the company posted profit of $148 million on sales of $919 million.
