Selling 'insurance' after the ID theft flood

When the massive data leak at ChoicePoint Inc. became widely known last month, reactions varied: Consumers worried about identity theft. Lawmakers called for hearings. Other data brokers began looking at their own files.

Officials at the credit bureau Equifax spotted a great marketing opportunity.

Equifax is one of many companies that sell credit monitoring services, aimed at letting consumers know when there's unusual activity in their credit reports. Credit Watch, the Equifax product, costs consumers $100 a year.

Days after the ChoicePoint break-in was first reported by MSNBC.com, Equifax sent an e-mail to its Internet marketing affiliates. They were told to quickly jump at the opportunity:

"Attention Link Partners:­ Credit Watch Sales Opportunity

Identity theft is prevalent in the news right now, especially with the high profile case of stolen consumer information. Thousands of identities may have been compromised. In order to help consumers understand this threat and how this crime can affect them, Equifax created an Identity Theft Awareness campaign that we want to share with you.  Starting on Friday 2/18 our home page began to highlight the news articles and the growing threat to consumers."

The e-mail went to say that the credit bureau planned to purchase additional Internet advertisements for about two weeks to take advantage of the sales opportunity.

Equifax confirmed that the e-mail, which was obtained by MSNBC.com, was authentic, and was sent out in response to the ChoicePoint incident. The company said that the Internet advertising, however, was part of its normal marketing strategy and did not represent a specific increase in spending in response to ChoicePoint.

Vince Corica, head of Equifax's consumer-oriented "Personal Solutions" group, said the ChoicePoint incident and similar high-profile news items that draw attention to the problem of identity theft were natural times to market the company's credit-monitoring product.

"You sell Christmas trees in December. You sell turkeys at Thanksgiving," he said.

"The ChoicePoint incident merely accentuates that somebody has to stand between ID thieves and the consumer. We know consumers have to protect their credit around the clock, and our mission is to get that word out in as many ways as we can," Corica said.

'Profiteering at its worst'
Privacy advocates blasted Equifax for trying to profit off a problem that they believe the credit bureaus helped create.

Linda Foley, executive director of the Identity Theft Resource Center, said she thought the Equifax ad was tasteless.

"This is a profiteering at its worst," Foley said.  "They are trying to cash in on the hysteria it caused. ... Consumers beware. It is clear that at least some of corporate America considers you nothing more than a cash cow."

BOB SULLIVAN ON CHOICEPOINT THEFT Database giant gives access to fake firms Read the Feb. 14 story that started it all Data theft affects 145,000 nationwide Suspect agrees to plea deal ChoicePoint files found riddled with errors No easy way to fix mistakes, either ChoicePoint CEO grilled by Congress Data broker backs some new regulations

Gail Hillebrand, senior attorney at Consumers Union, said the credit bureaus regularly jump on identity theft news as a sales opportunity for the consumer products.

"Any time there is a (data) breach or other publicity about identity theft, we see a ramp up in advertising," she said.  "It's not surprising. We saw this at the time the free credit report was in the news. 

"But the ironic thing is the credit reporting agencies are helping to facilitate (identity theft) by not having careful and accurate files," she said. "Consumers should stay away from high-priced credit monitoring services."

Corica disagreed. "I don't understand why anyone would react negatively to someone trying to bring a solution to the consumer," he said.

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