You might not be aware, but you share your data every day, even more than a few times in a day. We sign up for something online or input any type of personal information on an app and think “safe” — maybe not entirely safe, but we still feel like we have a choice to input our data when we’re prompted.
Sometimes we don’t have a choice in providing data to a company, but we have to trust that the company is keeping our personal and sensitive information safe. Equifax (NYSE: EFX), a consumer reporting agency company that allows you to receive your credit report, had a data breach back in 2017. You’ve probably had a credit report before and know the type of personal information it asks from you, but not only that, it details your entire credit history. If that type of information gets into the wrong person’s hands, it could be extremely detrimental to a person’s future.
Back in 2017, Equifax had a massive data breach that had its consumers’ private information compromised. This past Monday, Equifax agreed to pay $700 million to settle federal and state investigations about how it handled a massive data breach and the effects it had on almost 150 million people — roughly 56% of Americans.
The settlement hasn’t been approved by a judge, but it’s expected to be a six-month process and includes $425 million to directly help consumers who were affected by the breach. There will be a $300 million restitution fund for consumer compensation with an additional $125 million ready if the initial funds run out.
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Equifax’s CEO Mark Begor made a statement and said:
We have been committed to resolving this issue for consumers and have the financial capacity to manage the settlement. This comprehensive settlement is a positive step for U.S. consumers and Equifax as we move forward from the 2017 cybersecurity incident.
According to the company, individual consumers will be able to claim up to $20,000 for any losses or fraud that was caused by the incident or for any out-of-pocket expenses that those consumers had to pay, like credit monitoring services or paying to freeze and unfreeze credit reports. Equifax is offering its own credit monitoring service and fraud assistance for consumers free of charge.
Equifax’s 2017 breach was one of the largest data breaches in history. It eventually reported in September 2017 that there was a data breach that could have affected 147 million consumers. It was later found that the company was aware of the breach back in March of 2017. Hackers were able to access consumers’ private information, like names, Social Security numbers, dates of birth, credit card numbers, and even driver’s license numbers.
Attorney General Letitia James of New York helped lead the states’ investigation and had this to say:
Equifax put profits over privacy and greed over people, and must be held accountable to the millions of people they put at risk. This company’s ineptitude, negligence, and lax security standards endangered the identities of half the U.S. population.
In part of the settlement reached on Monday, Equifax agreed to pay $175 million in civil penalties to states and a $100 million fine to the Consumer Financial Protection Bureau.
While Equifax’s data breach back in 2017 might have been the largest data breach in history, it doesn’t mean something like this couldn’t happen again. People and businesses are connected in so many ways and blindly rely on certain security measures. And sometimes those security measures aren’t the most secure. A company like Equifax should have been monitoring its security efforts more closely or ensuring that it was using security solutions that would prevent hackers from stealing consumers’ information.
We’re living in a digital age and get more and more connected every day. Cybersecurity should be something a company splurges on and it should be something that you think about. And as cybersecurity becomes a bigger market, there will be a need for secure security solutions, and the company that’s providing those solutions is going to benefit immensely.
Until next time,
Jennifer Clark
Pro Trader Today