Hackers Grab LexisNexis Info on 32,000 People

Hackers have compromised databases belonging to LexisNexis and stolen information on at least 32,000 people, according to a statement issued today by LexisNexis's parent company, Reed Elsevier.

The hackers stole passwords, names, addresses, Social Security numbers, and drivers license numbers of legitimate customers of the company's Seisint division. Seisint collects data on individuals that law enforcement agencies and private companies use for debt recovery, fraud detection, and other services.

LexisNexis identified the incidents in a review of security procedures and warned that there may be more incidents of data theft, Reed Elsevier said. The incident recalls eerily similar recent revelations about compromises at Seisint competitor ChoicePoint, which acknowledged in February that hackers had gained access to data on 145,000 people.

LexisNexis, which acquired Seisint of Boca Raton, Florida, in September for $775 million, expressed regret over the incident and said that it is notifying the individuals whose information may have been accessed and will provide them with credit-monitoring services.

The company also said that it had notified law enforcement authorities and is assisting with investigations of the fraudulent account access.

The U.S. Secret Service is actively involved in an investigation of the incident, but declined to provide any details about the case through spokesperson Jonathan Cherry.

Massive Database

Like ChoicePoint, Seisint maintains a massive database of public and private information on individuals, including Social Security numbers, credit histories, and criminal records. Seisint made news in recent years as the data source behind the Multistate Anti-Terrorism Information Exchange (MATRIX) system, a program to bring together criminal and public records from participating U.S. states.

Bill Shrewsbury, a vice president at Seisint, said that identity thieves used a different approach to breach the company's database than was used to obtain ChoicePoint's data, but he declined to elaborate.

LexisNexis is taking action to improve its ID and password administration security and its customer screening, the company said in its statement.

In an e-mail statement, Kurt Sanford, president and CEO of LexisNexis Corporate and Federal Markets, said that the company will improve the user ID and password administration procedures that its customers use and will devote more resources to protecting user's privacy and reinforcing the importance of privacy.

Despite the security breach, Sanford defended LexisNexis's business. The company provides important products for fraud detection and identity authentication that are used by officials in law enforcement and homeland security, as well as by the private sector. The information is used to "safeguard citizens, find missing children, and reduce consumers' financial losses," Sanford said.

More Fuel for Security Fire

But the LexisNexis security breach is likely to add more fuel to the fire of public anger over lax data privacy laws, said Mark Rasch, vice president and chief security counsel at security firm Solutionary.

The incident is just the latest in a series of revelations from various companies about consumer data being leaked or lost. Those incidents include the ChoicePoint hack and Bank of America's disclosure last week that it lost digital tapes containing the credit card account records of 1.2 million federal employees, including 60 U.S. senators.

ChoicePoint, of Alpharetta, Georgia, has been the focus of intense scrutiny and criticism since it acknowledged that identity thieves who posed as legitimate customers gained access to the company's database of 19 billion public records. Some of the information stolen from ChoicePoint has since been used in approximately 750 identity theft scams, according to the company.

The company said last week that it is discontinuing data sales to many of its customers, except when the data helps complete a consumer transaction or supports a government or law enforcement investigation.

Tighter Federal Controls

Since disclosing the security breach, ChoicePoint has been the subject of a U.S. Federal Trade Commission inquiry into its compliance with federal information security laws, a U.S. Securities and Exchange Commission (SEC) investigation into possible insider stock trading violations by its CEO, and lawsuits alleging violations of both the federal Fair Credit Reporting Act (FCRA) and California state law. ChoicePoint disclosed the inquiries in a filing to the SEC on March 4.

Tighter federal controls on the use of consumer data are needed to prevent grievous security lapses like those at ChoicePoint and Reed Elsevier, as well as the lawsuits that follow, Rasch said.

Third-party purveyors of personal data, such as ChoicePoint and Seisint, should have to notify individuals when they sell their personal information. Currently, these companies do not have to notify the people whose information they trade, he said.

Rash also believes that the FCRA should be amended to cover data brokers, perhaps making them liable for selling inaccurate information and requiring them to pay to repair the credit rating of individuals harmed by identity theft following a breach of their systems.