Wednesday, February 23, 2005
Copyright © Las Vegas Review-Journal

JOHN L. SMITH: Your personal information available at a bargain --- for crooks

You can find almost anything at Sam's Club. From truck tires to tortellini, it's all there.

Even information about your neighbors.

Sam's Club is the home of big bargains, but it's also been a good place to find information provided by the ChoicePoint computer data company.

ChoicePoint announced this week that a criminal security breach resulted in the leak of information on nearly 145,000 people throughout the 50 states and three U.S. territories, including 739 Nevadans. The company is investigating the breach and has sent notices to the affected people, who risk having their identities stolen and their personal finances ruined.

Identity theft is fast becoming the nation's top white-collar crime with billions lost and millions of Americans being hit by everything from credit card fraud to mortgage scandals. All adept thieves need is reliable background information -- the kind that often finds its way into public records and credit reports.

That same information is also used to conduct background checks for prospective employees and home buyers.

Collecting and collating all those documents is a formidable challenge, and that's where ChoicePoint comes in.

Theoretically, ChoicePoint's information wasn't accessible to just anyone. Those seeking the company's services needed to fill out a background application available online. But it's becoming apparent that clearing that hurdle was as easy as stepping off a curb.

Southern Nevada private investigators, most of whom asked not to be identified, have used ChoicePoint's information to augment investigations and consider the company credible and reliable. They also say its semi-confidential resources are accessible to almost anyone who is the least bit creative in filling out the company's information application.

There was no need for computer hackers to play "Mission Impossible" with the company's secured system. According to multiple sources, obtaining the information was about as difficult as opening a box of Cheerios. Thieves opened phony businesses under assumed names, then applied for the information and received approval.

You'd think a company with 19 billion public records in its database could spot suspicious applicants, but it didn't happen.

Months ago, members of the Nevada Society of Investigators warned the state Private Investigators Licensing Board that ChoicePoint's information was available through Sam's Club and that the company's background checking procedure was full of holes. (They also suggested the information broker apply for a state P.I. license.) Although the private investigators were looking after their own business interests, they made an excellent point about such information being so easily disseminated.

It was an invitation for thieves to come and do what they've apparently done.

"This is a major problem," BlueTree Investigative and Administrative Services' Frank Petrasich says. He was among the investigators who brought the issue to the state licensing board. "We felt that it was a danger to the public. Most licensees are very conscious of protecting people's identity. We understand the threat that it poses to our society, and we really make a concerted effort to make sure what we give out is not used in any way to harm somebody."

A source who asked not to be identified said he found it easy to fool the system. As a test, an associate simply filled out an online application with trumped-up information and was quickly approved to purchase the company's services. The applicant didn't have to prove he'd actually purchased a business license.

"We were appalled," the source said.

But the ChoicePoint trouble is minor compared with the massive identity theft occurring worldwide. The game is enormous. Just this week in New York, Gambino crime family associates pleaded guilty to participating in a $230 million Internet credit card scam.

That makes the trouble at ChoicePoint seem quaint by comparison, but it's disturbing to know you don't need to be a former KGB agent to access the company.

All you need is a Sam's Club card and a little ingenuity.

John L. Smith's column appears Tuesday, Wednesday, Friday and Sunday. E-mail him at Smith@reviewjournal.com or call 383-0295.