FTC imposes $10M fine against ChoicePoint for data breach
JANUARY 26, 2006 (COMPUTERWORLD) - The U.S. Federal Trade Commission (FTC) has imposed a $10 million civil penalty against data aggregator ChoicePoint Inc. for a massive data security breach that resulted in the compromise of nearly 160,000 consumer records last year (see “ChoicePoint to tighten data access after ID theft”).
In addition to the penalty, which FTC Chairman Deborah Platt Majoras described as the largest ever levied by the agency, ChoicePoint has been asked to set up a $5 million trust fund for individuals who might have become victims of identity theft as a result of the breach.
As part of its agreement with the FTC, Alpharetta, Ga.-based ChoicePoint will also have to submit to comprehensive security audits every two years for the next 20 years.
“This is an important victory for consumers,” Majoras said. “This tells companies that they must protect sensitive consumer information. They must guard the front door as well as guard the back door against hackers.”