Senators rip into ChoicePoint, Bank of America on data losses

IDG News Service - Several U.S. senators faulted ChoicePoint Inc. and Bank of America Corp. yesterday for recent large-scale identify thefts from the two companies, and some lawmakers called for national legislation that would regulate what data-collection companies can do with private information.
Two members of the Senate Banking Committee, Sen. Jon Corzine (D-N.J.) and Sen. Charles Schumer (D-N.Y.), announced plans to introduce legislation to regulate data brokers -- companies that sell private information such as Social Security numbers and credit histories to law enforcement agencies, insurance companies, lenders and other businesses.
Speaking at a committee hearing, Sen. Patrick Leahy (D-Vt.) criticized ChoicePoint for failing to recognize legitimate customers after ID thieves using stolen identities set up businesses that requested hundreds of thousands of background-check records from the company in 2004.
In mid-February, ChoicePoint disclosed that identity thieves had gained access to the personal information of up to 145,000 U.S. residents. The Alpharetta, Ga.-based company maintains a 19 billion-item database including Social Security numbers, driver's license numbers and credit data.
"It was an irresponsible violation of the fiduciary relationship they have with their customers," Leahy said of ChoicePoint.
Leahy also criticized Charlotte, N.C.-based Bank of America's decision to transfer a digital tape containing private data on a commercial airline flight. In late February, Bank of America announced that on one such flight, it lost digital tapes containing the credit card account records of 1.2 million federal employees, including 60 U.S. senators.
Leahy questioned the apparently common practice in the financial industry of transferring such data on commercial flights, saying he has lost his luggage too many times to trust that airplane holds are secure. "I don't know what these people are thinking," Leahy said. "You can imagine how disillusioned their customers must feel that Bank of America didn't care any more about them."
Sen. Paul Sarbanes (D-Md.) called ChoicePoint the "world's largest [private] intelligence operation."
In addition to the ChoicePoint and Bank of America incidents, LexisNexis Group's parent company, Reed Elsevier PLC, announced this week that hackers had compromised databases and stolen the personal information of at least 32,000 people (see story).
In the first of several likely congressional hearings on ID theft following the recent disclosures, representatives of ChoicePoint and Bank of America were scheduled to testify. But their appearances were rescheduled until next week after a conflict with several votes on the Senate floor.
Both companies in written testimony apologized for the ID thefts, said they have taken steps to ensure that similar incidents won't happen and welcomed a debate on national