The ChoicePoint Attack

ChoicePoint, the Georgia-based corporation, offers risk-management and fraud-prevention data. Traditionally, ChoicePoint provided motor vehicle reports, claims histories, and similar data to the automobile insurance industry; in recent years, it broadened its customer base to include general business and government agencies. Today, it also provides data for volunteer and job-applicant screening and data to assist in location of missing children. ChoicePoint has over 4,000 employees, and its 2004 revenue was $918 million.

In the fall of 2004, ChoicePoint was victim of the fraudulent spoofing attack in which unauthorized individuals posed as legitimate customers and obtained personal data on more than 145,000 individuals. According to a company's Web site:

These criminals were able to pass our customer authentication due diligence processes by using stolen identities to make and produce the documents needed to appear legitimate. As small business customers of ChoicePoint, these fraudsters accessed products which contained basic telephone directory-type data (name and address information) as well as a combination of Social Security numbers and/or driver's license numbers and, at times, abbreviated credit reports. They were also able to obtain other public record information including, but not limited to bankruptcies, liens, and judgments; professional licenses; and real property data.

ChoicePoint became aware of the problem in November 2004, when it noticed unusual processing activity on some accounts in Los Angeles. Accordingly, company contacted the Los Angeles Police Department, which requested that ChoicePoint not reveal the activity until the department can conduct an investigation. In January, the LAPD notified ChoicePoint that it can contact the customers whose data had been compromised.

This crime is an ex of the failure of authentication and not a network break-in. ChoicePoint's firewalls and other safeguards were not overcome. Instead, the criminals spoofed legitimate businesses. Infiltrators obtained valid California business licenses, and until their unusual processing activity was detected, appeared to be legitimate users.

In response to this problem, ChoicePoint established the hotline for customers whose data were compromised to call for assistance. They also purchased the credit report for each of these people and paid for a one-year credit-report-monitoring service. In February 2005, attorneys initiated the class-action lawsuit for all 145,000 customers with the initial loss claim of $75,000 each. At the same time, the U.S. Senate announced that it will conduct an investigation.

Ironically, ChoicePoint exposed itself to the public relations nightmare, considerable expense, a class-action lawsuit, a Senate investigation, and a 20 percent drop in its share price because it contacted the police and cooperated in the attempt to apprehend the criminals. When ChoicePoint noticed the unusual account activity, had it simply shut down data access for the illegitimate businesses, no one would have known. Of course, the 145,000 customers whose identities had been compromised would have unknowingly been subject to identity theft, but it is unlikely that such thefts could have been tracked back to ChoicePoint.
Source: choicepoint.com/news/statement_0205_1.html#sub1 (accessed February 2005). Used with permission of Choice.Point.com.

Answer the following problems:

problem1) Itemize the nature of the information security breach at ChoicePoint and how this adversely affected the organization.  Be sure to include both tangible and intangible losses in preparing your response.

problem2) What actions were taken by both ChoicePoint and the “authorities” to address the crisis, and what is your assessment of each action taken? 

problem3)What reactive steps by ChoicePoint might have mitigated their losses subsequent to their discovery of the information security breach?  describe/justify your choices. 

problem4) What proactive steps by ChoicePoint might deter a reoccurrence of such an information security breach?  describe/justify your choices.