LexisNexis Says 32,000 Profiles Stolen

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 incident.

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 misappropriated.

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 pence.

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]

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Lisa Minter
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