Consumer Help Web readers will remember the media frenzy surrounding the first of a well publicized series of data breaches in 2005. Information services giant ChoicePoint was one of the first to go public that year with a massive breach that was originally thought to potentially impact 140,000 consumers.
Within days, the United States Senate was threatening hearings, and MSNBC was following a story regarding the timing of insider trading of the company's stock. The company made good with the FTC a year later, paying $10 million in penalties and another $5 million in consume redress. The penalties were the largest in the FTC's history, and the government agency issued an order requiring ChoicePoint to implement more stringent security measures.
Now the states have bellied up to the bar. A group of 43 states and the District of Columbia have settled with the company for a combined $500,000. That is a stiff fine, of course, and the company has already paid the federal government more than $15 million, but one wonders what was served by the states jumping into the fray for a few thousand dollars each?
ChoicePoint will have to continue upgrading its security safeguards, which is a good thing, but the "piling on" of the states one year after the company took a credibility, business continuity and financial hit seems excessive. Perhaps the money might have been better spent at ChoicePoint to protect consumer data.
Labels: Choice Point, data breach, FTC
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