Nearly all of the country's state attorneys general will drop civil charges against ChoicePoint that allege it failed to adequately maintain the privacy and security of its consumers' personal information.
A settlement announced Thursday provides the 44 attorneys general with a total of $500,000.
ChoicePoint provides identification and credential verification services to business, government agencies and non-profit organizations. In Feb. 2005, the company announced that criminals masquerading as legitimate businesses gained access to its customers' personal information. More than 163,000 consumers were affected, Washington Attorney General Rob McKenna said.
As part of the settlement, ChoicePoint will change the way it credentials new customers.
"This is the first time a data broker has agreed to safeguard publicly available information, including social security numbers, using the same credentialing methods as it uses to safeguard financial information that is protected by law," Mississippi Attorney General Jim Hood said.
ChoicePoint must perform audits, including independent audits, to make sure it is properly identifying individuals or businesses requesting information.
"A business that collects consumers' personal information has a duty to maintain the privacy, security and integrity of that information by, among other things, restricting access and maintaining proper security measures to safeguard the data," Tennessee Attorney General Bob Cooper said.
In Jan. 2006, ChoicePoint settled its case with the Federal Trade Commission, paying $10 million in penalties and $5 million in restitution. The deadline for affected consumers to file for restitution is June 22.
Consumers may be reimbursed for: Unauthorized charges on existing accounts not covered by the bank or credit card company; money paid on new accounts opened in the consumer's name; money paid to a debt collector on new accounts opened in the consumer's name; cost of ordering new checks; cost to file or receive copy of police report; notary fees; and costs associated with correcting unauthorized charges and/or disputing incorrect information for expenses such as telephone calls, mail, fax, photocopy charges, hourly fees for Internet access or travel expenses.
In addition to Tennessee, Washington and Mississippi, other states in the agreement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Texas, Vermont, Virginia, West Virginia, Wisconsin and the District of Columbia.