FTC to Reimburse Victims of ChoicePoint Security Lapse

by Mike Bevel, CollectionIndustry.com

Thanks to some security and record-handling malfunctions, ChoicePoint Inc. agreed back in January to pay the FTC a fine of $15 million to settle charges that it failed to adequately protect consumers' personal financial information.

$10 million of the $15 million went straight to the FTC; $5 million was to be set aside in a victims’ fund to be reimbursed to those who file claims. With roughly 163,000 Americans at risk – that works out to what? $30 a pop? Of course, that’s assuming that all 163,000 suffered some sort of repercussion. As it stands, the FTC sent out claim forms to some 1,400 victims identified by law enforcement agencies (which sweetens the settlement to about $3,500 per).

The news is a welcome event to the defrauded ChoicePoint customers. Back in September, it wasn’t clear if they’d receive any kind of settlement at all, thanks in part to a cautious investigation and slow-to-move infrastructure.

The FTC will send out additional forms if law enforcement agencies identify more victims, Claudia Bourne Farrell, a spokeswoman for the agency, said. Claim forms should be postmarked by Feb. 4, 2007, in order to be considered, the agency said.

ChoicePoint has also been required to implement new procedures to screen its customers. Deborah Platt Majoras, chairwoman of the FTC, said Tuesday that the company has responded to the settlement in a "very constructive way."

Matt Furman, a spokesman for ChoicePoint, said Wednesday, "We are pleased they are moving forward and stand ready to help the commission in any way we can."

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