Choicepoint Responds
Mr. Chuck Jones of Choicepoint posted a comment to my previous post that I wish to highlight. I appreciate his feedback. Here is an extract from his original comment:
“Your presumption of ChoicePoint’s involvement in the subprime mortgage market is grossly overstated. Our company is not ‘very heavily levered towards subprime,’ as you wrote.
On January 24, ChoicePoint’s management laid out for investors the details of its Marketing Services business, which is the segment most directly tied to the subprime mortgage industry. During this conference call with industry analysts, we reported that 30 percent of the Marketing Services’ 2006 segment revenues of $79.7 million (or less than 3 percent of ChoicePoint’s annual consolidated revenues) came from mortgage customers and that this portion of the segment’s revenues was down 35 percent from 2005 results.
Also, you incorrectly stated that “a few million identities were stolen” in the fraudulent data access incident which ChoicePoint disclosed in 2005. The fact is that we provided notice to fewer than 170,000 individuals who MAY HAVE BEEN affected by this incident. The number of individuals actually affected is estimated by various government agencies to range from about three dozen to as high as 1,000 consumers.
ChoicePoint has spent a lot of money and time to improve our products and enhance existing policies and procedures, so that even our harshest critics now acknowledge ChoicePoint as being a role model for our industry. To read a New York Times article on this topic, please go to http://www.choicepoint.com/news/featureNYT_112206.html. To read a report written by the independent research firm, Gartner, go to http://www.choicepoint.net/choicepoint/news/choicepoint_1996.pdf“
I stand corrected on the number of stolen identities. That was a careless oversight on my part and my apologies to Choicepoint for that. As for the leverage towards sub-prime, I am still of the opinion that exposure to the mortgage business will impact Choicepoint. We just have to wait and see. If I am wrong, it won’t be the first time. But I am willing to take that chance.
– Faisal Laljee
