"Serious" Errors are Common

By John McCormick  |  Posted 2005-06-14 Print this article Print

Steven Calderon was into his second week working as a security guard for Fry's Electronics when Anaheim, Calif., police walked in and arrested him. Fry's had requested a background check on Calderon, which was done by The Screening Network, a service of C

"Serious" Errors are Common

Not only is information going unchecked by ChoicePoint, but the way the company aggregates data and then distributes it can introduce errors, such as mismatching profiles of different individuals with their insurance or criminal histories. As might have happened with the two Calderons.

There appear to be no generally accepted statistics on data accuracy rates among data brokers such as ChoicePoint, which deals in insurance claims history, court documents and other public records. However, there are statistics on the closely related field of credit reporting, in which companies such as Equifax, Experian and TransUnion operate. ChoicePoint, in fact, was spun off from Equifax in 1997.

A 2004 study by the U.S. Public Interest Research Group found that 54% of all credit agency reports contain errors. Twenty-five percent of these errors were considered "serious," meaning the reports include erroneous listings of delinquencies, accounts in collection, bankruptcies and other information that could result in a denial of credit.

Similarly, a 2003 Government Accountability Office report, citing statistics from the Consumer Federation of America, found that 78% of credit-agency files omitted account information, 82% had inaccuracies regarding revolving accounts or collections, and 96% had bad credit-limit information.

Yet every company wrestles with data accuracy. The fact is, America's vast panoply of databases are riddled with errors, according to data quality experts such as Ted Friedman, a vice president at research company Gartner, and Larry English, president of Information Impact, a consulting company that specializes in data quality.

Indeed, data quality problems extend to just about every corner of corporate America:

  • 80% of medical bills have multiple errors, from typos to erroneous charges, according to the Medical Billing Advocates of America.
  • 60% of all retail invoices contain data errors, such as incorrect products, quantities and weights, according to management consultancy A.T. Kearney.
  • 20% of U.S. mail and commercial package deliveries were returned because of incorrect names or addresses, according to business and information-technology executives polled by Forrester Research in 2004.
  • 10% to 15% of all direct mail is undeliverable because the addresses are bad, according to the Direct Marketing Association.

    In fact, a Gartner report last year said that more than 25% of the critical data in Fortune 1,000 databases is inaccurate or incomplete. This includes faulty inventory descriptions, bad product codes and product descriptions, erroneous financial data, inaccurate supplier information and incorrect employee data.

    "If someone says their data is always accurate, they're lying," says Dana Rafiee, the U.S. director of Destiny Corp., an international business and technology consulting company. The accuracy of information, he points out, "is a major issue in every organization."

    The cost of all this bad data? The Data Warehouse Institute, a business intelligence and data analysis industry consortium, estimates errors are costing U.S. businesses about $600 billion a year. The fallout? Everything from redoing a job that went astray because of bad data, to misdirected shipments due to faulty addresses, to the cost of correcting errors in a database.

    Poor data collection and analysis can even spoil a presidential election, a situation that continues to shadow ChoicePoint nearly five years later.

    To get ready for the 2000 election, the state of Florida contracted with data broker Database Technologies (DBT) to clean its voter registration list of convicted felons, people registered to vote in more than one county and the names of people who had died. But because of the way Florida defined the search criteria, DBT warned the review would be overly inclusive. As a result, according to various reports, DBT's housecleaning didn't just net felons, for instance; it picked up people whose names were similar to those of felons. DBT officials said voting officials were supposed to check the list. It's still unclear how many voters were prevented from casting ballots in Florida, a state George W. Bush carried by a little more than 500 votes.

    ChoicePoint acquired Database Technologies in May 2000, just a few days after DBT turned in its "cleaned" file to Florida officials.

    Story Guide:

    Blur: The importance of Accuracy

  • Not Just Security — Accuracy.
  • "Serious" Errors are Common
  • Data Customers Pay the Costs
  • Collecting Data Without Garbage Filters
  • Records "Full of Inccuracies"
  • Crap In, Crap Out
  • Fix It Yourself
  • No Way To Check
  • ChoicePoint Data at a Glance


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