By Jeffrey Goldfarb and Andy Sullivan
LONDON/WASHINGTON (Reuters) - Data broker LexisNexis on Wednesday said
that identity thieves have gained access to profiles of 32,000
U.S. citizens, prompting calls for better consumer protections after a
rash of similar break-ins.
The U.S. Secret Service and the FBI said they were investigating the
The announcement comes amid heightened scrutiny of data brokers and
other companies that handle consumer information, after rival
ChoicePoint Inc. said last month that thieves had gained access to at
least 145,000 consumer profiles.
U.S. lawmakers plan at least two hearings over the coming week and are
considering new regulations.
LexisNexis, a subsidiary of Anglo-Dutch Reed Elsevier (ELSN.AS), said
a billing complaint by a customer of its Seisint unit in the past week
led to the discovery that an identity and password had been
The information accessed included names, addresses, Social Security
and driver's license numbers, but not credit histories, medical
records or financial information.
LexisNexis, which bought Seisint last year, said it is contacting the
32,000 people affected and offering them credit monitoring and other
support to detect any identity theft.
The company is also changing the way it handles passwords and other
security features, said Kurt Sanford, president and CEO of the
company's corporate and federal markets division.
"LexisNexis sincerely regrets these circumstances and continues to
work aggressively and expeditiously to minimize the impact of this
incident to consumers and our customers," Sanford said in a statement.
A spokesman declined further comment.
Seisint, based in Boca Raton, Florida, uses property records and other
public data to build profiles on millions of U.S. consumers, which it
sells to law-enforcement agencies and financial institutions.
A Seisint-created criminal-information database called Matrix came
under fire when it provided government officials with the names of
120,000 people whose personal information supposedly fit the profile
of a terrorist.
Identity theft is a growing problem as criminals use stolen personal
information to run up charges, costing companies and individuals
billions of dollars each year.
Until recently identity thieves could find credit-card numbers and
other sensitive information on customer receipts, bills and other
easy-to-obtain forms, but have recently turned their attention to
companies that hold such information in bulk.
"As the value of what you're trying to steal increases, so does the
effort that the bad guys will put into it," said Paul Beechey, a
security expert with UK defense group QinetiQ.
Along with LexisNexis and ChoicePoint, financial group Bank of America
Corp. and discount-store owner Retail Ventures Inc have reported lost
or stolen personal information on customers in recent weeks.
The only reason the public is aware of these incidents is because of a
California law that requires companies to disclose them, said Jim
Dempsey, executive director of the Center for Democracy and
Technology, a Washington public-interest group.
Florida Democratic Sen. Bill Nelson who has introduced a bill that
would impose tougher regulations on the industry, learned about the
Seisint breach Wednesday morning as he spoke about identity theft on
the Senate floor.
"Are we going to do anything about it? I sure hope so, and I hope that
we are going to have Congress start to take action," Nelson said.
Reed Elsevier, which bought Seisint in July 2004 for $745
million, reaffirmed financial targets in the wake of the theft.
The company's shares in London closed down 1.87 percent at 537 1/2
Though Seisint represents only about 1.5 percent of Reed Elsevier's
revenues, analysts said the situation could harm management's
credibility and acquisition track record.
(Additional reporting by Emma Thomasson and Theo Kolker in
Amsterdam and Adam Pasick in London)
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[TELECOM Digest Editor's Note: So 32 thousand people get their records
ripped off due to the clumsiness of Lexis/Nexis and their management's
main concern is 'this may make it harder for *them* to aquire still
another company'. My heart really bleeds for them. PAT]