In December 2004, EPIC filed a complaint with the FTC against databroker ChoicePoint. EPIC urged the agency to investigate the compilation and sale of personal dossiers by data brokers such as ChoicePoint. EPIC argued that the dossiers may constitute "consumer reports" for purposes of the Fair Credit Reporting Act, thus subjecting both the information seller and the buyer to regulation under the Act. Furthermore, EPIC argued that it is incumbent upon the Commission to analyze whether the sale of these dossiers circumvents the Act, giving businesses, private investigators, and law enforcement access to data that previously had been subjected to Fair Information Practices. In February 2005, EPIC supplemented the ChoicePoint complaint and raised three additional issues relevant to the rise of commercial databrokers. In 2005, based on the EPIC complaint, the FTC alleged that ChoicePoint did not have reasonable procedures to screen and verify prospective businesses for lawful purposes and as a result compromised the personal financial records of more than 163,000 customers in its database. Because of this breach, the FTC alleged that ChoicePoint violated the Fair Credit Reporting Act by furnishing the financial records to subscribers that did not have a permissible purpose to obtain them. The FTC additionally alleged that ChoicePoint engaged in unfair or deceptive practices in violation of Section 5 of the Federal Trade Commission Act. In January 2006, the FTC announced a settlement with ChoicePoint, requiring the company to pay $10 million in civil penalties and provide $5 millions for consumer redress. It is the largest civil penalty in FTC history. ChoicePoint was also required to verify, "(1) the business identity of the subscriber, and (2) that the subscriber is a legitimate business engaged in the business certified and has a permissible purpose for obtaining consumer reports."
This is the US's stipulated judgment & order filed concurrentently w/ the complaint.
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