Comments on: CSO Breach SOP == FUD?

By: Sharon Besser

Sharon Besser — Thu, 21 Sep 2006 11:29:21 +0000

According to Google finance, ChoicePoint’s net income is actually decreasing (http://finance.google.com/finance?q=Choicepoint) . We’ll see how they did this quarter, but it looks like their competitors are doing much better

By: Arthur

Arthur — Thu, 21 Sep 2006 10:25:52 +0000

Sharon,
Thanks for the heads up, I’ll check out the case study. For what it’s worth though from various public filings, here is a comparison of earnings from 2004-2006 from Choicepoint:
2004 – 918.7 million
2005 – 1.1 billion
Q1 2005 – 259.3 million
Q2 2005 – 227 million
Q1 2006 – 269.9 million
Q2 2006 – 240.8 million
From this we can see that although Choicepoint seems to have taken a short term hit in their earnings, sales in fact went up in 2005 and so far are up again in 2006. And this from a company that pretty much did everything wrong in handling the incident. I’ll comment further after reading the Gartner report.

By: Sharon Besser

Sharon Besser — Wed, 20 Sep 2006 16:52:40 +0000

A Gartner publication (Publication Date: 19 September 2006 ID Number: G00142771) that presented the ChoicePoint case study, is an interesting read and very related to this issue. Among other finding, they present the following:
• It publicly reported specific expenses addressing the data breach incident totaling $27.3 million in 2005 and $1.8 million through 30 June 2006. Ongoing operational costs resulting from the changes the company made are now included in its normal cost structure.
• In 2005, the company lost nearly $20 million in business because of its deliberate decision to stop doing business with customers whose credentials could not be thoroughly validated.
• It became one of the most-audited companies in the U.S. in 2005: It underwent 43 third-party audits, five of which were SAS 70 audits of the company’s applications. In 2006, ChoicePoint expects to complete up to 30 audits, including a particularly grueling one required by the FTC.