FTC launches program for victims of ChoicePoint breach

The U.S. Federal Trade Commission (FTC) has begun mailing claim forms to more than 1,400 identity theft victims who spent money to clear up identity-theft problems due to a security breach at data broker ChoicePoint Inc. announced in early 2005.

The FTC began mailing claim forms to victims, identified with the help of law enforcement agencies, on Wednesday. The FTC has also created a Web site where consumers who do not receive a claims form can download one and obtain information about the claims process.

In January, the FTC and ChoicePoint reached a settlement requiring the company to pay US$5 million to be used to reimburse consumers for expenses caused by the data breach. ChoicePoint also agreed to pay a $10 million fine.

In February 2005, ChoicePoint announced that scammers had set up bogus businesses and contracted with the company to gain access to the personal information of 145,000 U.S. residents. The company, which found out about the breach in September 2004, later said the number of people whose information was lost in the breach was 163,000.

Consumers who receive a letter and have out-of-pocket expenses due to identity theft caused by the ChoicePoint security breach should submit claims promptly; the FTC needs claims to be postmarked by Feb. 4, 2007 for them to be considered. Consumers who do not receive a letter, but who believe that they have identity theft-related expenses due to this incident, may submit a claim by completing the form available on the FTC’s Web site or by calling 1-888-884-8772.

The amount applicants receive will depend on a number of factors, including the total number and amount of claims that the agency receives, the FTC said.

ChoicePoint issued a short notice about the FTC reimbursement program. “Even though ChoicePoint agreed to create a $5 million fund to assist potentially affected consumers, ChoicePoint has no role in deciding who will receive the money or the criteria used by the FTC to distribute the money,” the company said in a statement.

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