You seldom get to say something genuinely nice about a company -- at least not when that company's in the middle of a highly publicized scandal. Data processor ChoicePoint (NYSE:CPS), however, has gone out of its way to make this task easier -- and today it got something of a reward for its troubles.
ChoicePoint has worked hard to repair its relations with Congress, its customers, and even its "raw materials providers" -- that's you and me, the people whose personal information the company collects, sorts, repackages, and sells for profit. Last February, the company let identity thieves swipe more than 100,000 U.S. customers' private information. But my first column on ChoicePoint praised ChoicePoint for taking immediate action to protect those potential victims.
ChoicePoint was one of the first companies among its peers in the identity-theft scandal -- including BJ's (NYSE:BJ), Reed Elsevier (NYSE:ENL), and Retail Ventures (NYSE:RVI) -- to offer free credit monitoring for data theft victims. The company also promised to re-verify its clients' legitimacy to help avoid a repeat of the original identity theft.
ChoicePoint has now gone one step further in its efforts to prove itself an upstanding corporate citizen (and, one presumes, to convince Congress that the company and its industry can deal with data theft without tighter government regulation.) ChoicePoint voluntarily decided to curtail its sales of the most sensitive consumer data to private investigators, collection agencies, and certain financial institutions. First and foremost, it will no longer provide full Social Security numbers to such clients. Additionally, the company promised to "white out" Social Security numbers in background reports it sells to companies screening prospective employees.
The two moves, while likely welcomed by the individuals affected, didn't necessarily thrill ChoicePoint investors. They sold off the stock last week when a Wall Street Journal report announced the move -- and the sizeable dent it might create in company sales.
Fortunately, some good deeds do go unpunished. This morning, the Internal Revenue Service awarded ChoicePoint a five-year, $20 million contract to "batch process" public records for the IRS. There's no guarantee that the contract will compensate for the sales revenues ChoicePoint will voluntarily lose, and there's no suggestion that the two news items are connected. Even so, it's a nice ending to this story.
For more on the data-theft saga, read:
- BJ's Vs. the FTC
- Oops, They Did It Again
- Data Crimes Suggest Conspiracy
- What, Me Worry About ID Theft?
Fool contributor Rich Smith owns no shares in any company mentioned in this article.
