CSO

ChoicePoint has come a long way since two years ago, when it became the poster child for how not to react to a security breach. Since then, it has made some fundamental changes to its business model and tried to tighten access to the copious amounts of information it keeps about American consumers. This morning, James Lee, SVP and chief public and consumer affairs officer for the data aggregator, shared several lessons he has learned from the experience, as part of a conference on Maintaining Trust in Payments hosted by Visa USA and Harvard Business School Publishing.

Lesson 1: Security issues are going to happen. “How you respond is often more telling than what happened," Lee says. “You cannot respond quickly enough for some people. You cannot respond slowly enough for some people. It’s going to vary by stakeholder, and you have to make the decision within your organization, what is your philosophy? If I was going to make a recommendation, I would tell you, err on the side of the consumer.”

Lesson 2: Lawsuits are inevitable. “You are going to be sued,” Lee says. “You are going to meet many new and interesting friends who work at government agencies with three letters. You are going to make new friends at law firms that have more partners than you thought possible.”

Lesson 3: Make sure your communications with customers are clear and accessible. In dismissing customer complaints against ChoicePoint in California, Lee says that a judge cited the clear and accurate material ChoicePoint provided to the media and to customers themselves.

Lesson 4: Change your strategy if necessary. After the scandal broke, ChoicePoint announced that it was exiting a $20 million line of business because properly credentialing customers was too difficult. “We were not about to let 2 percent of the revenue put 98 percent of the enterprise at risk,” Lee says.

Lesson 5: Talk to your critics. “Embrace the horror,” Lee says, noting that ChoicePoint has had some 65 meetings over the last 18 months with some of its harshest critics. But he's confident that the short-term pain of hearing what they had to say will be outweighed by the long-term gain. “It’s a long road from scoundrel to elder statesmen,” he says, “and it’s measured in years.”

-Sarah Scalet