FTC Orders ChoicePoint To Pay $275,000 For 2008 Data Breach

ChoicePoint, which became a poster child for data breaches when it lost data on 163,000 consumers in 2005, has agreed to pay a penalty for a subsequent breach that compromised more than 13,000 identities last year.

According to an announcement by the Federal Trade Commission, ChoicePoint agreed to settle the FTC's charges that the company failed to implement a comprehensive information security program to protect consumer data, as required by a court order following the 2005 breach.

"This failure left the door open to a data breach in 2008 that compromised the personal information of 13,750 people and put them at risk of identify theft," the FTC says. The modified court order requires ChoicePoint to modify its data security assessment and reporting duties -- and orders ChoicePoint to pay $275,000.

In April 2008, ChoicePoint (now a subsidiary of Reed Elsevier) turned off a key electronic security tool used to monitor access to one of its databases, and for four months failed to detect that the security tool was off, according to the FTC.

"During that period, an unknown person conducted unauthorized searches of a ChoicePoint database containing sensitive consumer information, including Social Security numbers," the FTC says. The searches continued for 30 days. After discovering the breach, the company brought the matter to the FTC's attention.

The FTC alleged that if the security software tool had been working, ChoicePoint likely would have detected the intrusions much earlier and minimized the extent of the breach. The FTC also alleged that ChoicePoint's conduct violated a 2006 court order mandating the company institute a comprehensive information security program to protect consumers' sensitive personal information.

Under the agreed-on modified court order, filed on the FTC's behalf by the Department of Justice, ChoicePoint also is required to report to the FTC -- every two months for two years -- detailed information about how it is protecting the breached database and certain other databases and records containing personal information.

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