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LexisNexis Parent Set to Buy ChoicePoint
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One of the group's more important assets is a computer system that came with the purchase in 2004 of Seisint, an information service. Seisint created a controversial tool called the Matrix, which gave state and federal authorities new power to analyze records about Americans after the Sept. 11, 2001, terrorist attacks. At the time, officials at LexisNexis said the technology would help government investigators who were scrambling to improve the collection, analysis and sharing of information in the war on terrorism.
Now, the Risk and Information Analytics Group works with collections firms and health-care, financial services and insurance companies, along with local, state and federal agencies.
ChoicePoint disclosed in 2005 that it had mistakenly sold personal information on 145,000 Americans to identity thieves. In 2006, it was fined $10 million by the Federal Trade Commission over its failure to protect consumers' personal data. In 2005, a security breach at LexisNexis exposed as many as 310,000 consumers' Social Security numbers, driver's license numbers, names and addresses.
ChoicePoint has since reformed its data-security practices, and some civil libertarians say it has become a leader in privacy.
Still, the proposed acquisition raises significant issues that regulators must weigh, Rotenberg said.
"These are companies that will be able to sell very detailed profiles of individuals to businesses, insurers, government agencies and others, but individuals do not currently have a right to see what information about them is being sold to third parties," he said. "That is a very big privacy issue."
Peck said the two companies' services are aimed at protecting people's identities. "When you put two organizations like ours together, we're going to be able to provide our customers -- financial institutions, health-care providers, law enforcement -- a better tool to fight identity fraud. They're actually helping to protect people rather than creating some privacy issue."
The deal, which requires approval from either the Justice Department or the FTC, is expected to close this summer.
Staff researcher Richard Drezen contributed to this report.
