Consumer Data Firm Wins IRS Contract

ChoicePoint Inc., a provider of consumer credit reports and security software, said it won a five-year, $20-million contract with the Internal Revenue Service to process and deliver data files.

ChoicePoint, which has a database that holds more than 20 billion public records, provides services to businesses, nonprofit groups and as many as 25 government agencies.

The IRS contract is capped at $20 million; the value will vary depending on the volume of requests, said James Lee, the company’s chief marketing officer.

The company provides clients information on individuals or groups based on requested criteria, Lee said. Its employees never see the search results, he said.

“It is an automated process, and no one will see taxpayer information,” he said.

Alpharetta, Ga.-based ChoicePoint disclosed in February that the personal information of 145,000 Americans might have been compromised when thieves posing as legitimate small-business customers gained access to its database.

Authorities say at least 750 people were defrauded in the scam.

The scandal sparked a national debate over how personal information gets used and who has access to it.

The breach -- the first in a string of major security lapses this year involving several businesses, including LexisNexis, Bank of America Corp. and Citigroup Inc. -- also fueled calls for federal oversight of the data-brokering business.

In addition, hearings were held on Capitol Hill, and the Securities and Exchange Commission and the Federal Trade Commission began investigations of ChoicePoint.

ChoicePoint shares rose 5 cents to $38.02.

Bloomberg News was used in compiling this report.