The recent scandals have led to calls for tighter regulation of the data brokerage industry, creating the need for more complete information on the types of businesses that make up this industry, and the types of services they provide. This report provides an overview of the industry and specific case studies of ChoicePoint and LexisNexis. As the following case studies show, the danger of identity theft remains, despite the implementation of tighter safeguards by data brokers. ChoicePoint sells data to a wide variety of entities, from insurers to law enforcement. The ChoicePoint and LexisNexis scandals, however, have spurred debate over the security of personal information collected and sold by data brokers.
Disclosures of breaches of the customer databases of LexisNexis and ChoicePoint have raised interest in the business and regulation of data brokers, companies that collect personal information from public and private records and sell this information to public and private sector entities. The growth of this industry has generally tracked the increase in government and private sector use of personal information. The vast amount of personal information that data brokers collect and the improper access to such data, however, have spurred concern as to the dangers of identity theft. Identity theft is reportedly the fastest growing crime in America. This report provides an overview of the data brokerage industry and more specific background on LexisNexis and ChoicePoint.