Hackers Breach LexisNexis, Snatch Consumer Data

Hackers have compromised databases belonging to LexisNexis and stolen information on at least 32,000 people, according to a statement last week from LexisNexis' parent company, Reed Elsevier Inc.

The hackers stole passwords, names, addresses, and Social Security and driver's license numbers of legitimate customers of the company's Seisint division. Seisint collects data on individuals that's used by law enforcement agencies and private companies for debt recovery, fraud detection and other services.

LexisNexis identified the incidents in a review of security procedures and warned that there may be more cases of data theft. The incident is eerily similar to compromises at Seisint competitor ChoicePoint Inc., which acknowledged in February that hackers had access to data on 145,000 people.

Meanwhile. Retail Ventures Inc. in Columbus, Ohio, last week reported the theft of credit card and other personal information from customers at 103 of its 175 DSW Shoe Warehouse stores over the past three months. Officials said that a federal investigation of the theft is under way and that DSW is undertaking a review of its IT systems.

Notifying the Public

LexisNexis, which acquired Seisint Inc. in Boca Raton, Fla., in September for $775 million, said it's notifying people whose information may have been accessed and will provide them with credit-monitoring services.

The company also said it notified law enforcement and is assisting with investigations of the fraudulent account access.

The U.S. Secret Service is actively investigating the incident, but spokesman Jonathan Cherry declined to give any details about the case.

Like ChoicePoint, Seisint maintains a massive database of public and private information on individuals. Seisint is the data source for the Multistate Anti-Terrorism Information Exchange system, or Matrix, which brings together criminal and public records from participating U.S. states.

Bill Shrewsbury, a vice president at Seisint, said that identity thieves used a different approach to breach the company's database than what was used to get ChoicePoint's data, but he declined to elaborate.

In an e-mail statement last week, Kurt Sanford, president and chief executive of LexisNexis Corporate and Federal Markets, said that the company will improve the user ID and password administration procedures that customers use and will add resources to protect user privacy.

Despite the security breach, Sanford defended LexisNexis' business. The company provides important products for fraud detection and identity authentication that are used by law enforcement, homeland security and private-sector concerns, he said. The information is used to "safeguard citizens, find missing children and reduce consumers' financial losses," Sanford said.

The LexisNexis security breach is almost certain to add fuel to the fire of public anger over lax data-privacy laws, said Mark Rasch, vice president and chief security counsel at Solutionary Inc., a managed security services provider in Omaha.

Troubles Elsewhere

The incident is just the latest in a series of revelations about consumer data being leaked or lost. Recent incidents include the ChoicePoint hack and Bank of America Corp.'s disclosure that it lost digital tapes containing the credit card account records of 1.2 million federal employees, including 60 U.S. senators.

ChoicePoint in Alpharetta, Ga., has been the focus of intense scrutiny and criticism since it acknowledged that identity thieves posed as legitimate customers to gain access to the company's database of 19 billion public records.

Since disclosing the security breach, ChoicePoint has been the subject of investigations by the Federal Trade Commission and the Securities and Exchange Commission and the target of lawsuits alleging violations of the federal Fair Credit Reporting Act and California state law.

Tighter federal controls on the use of consumer data are needed to prevent additional grievous security lapses, like those at ChoicePoint and Reed Elsevier, as well as the lawsuits that follow, Rasch said.

Roberts is a reporter for the IDG News Service.

Copyright © 2005 IDG Communications, Inc.

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