Magazine article Information Today

Equifax: Yet Another Data Breach

Magazine article Information Today

Equifax: Yet Another Data Breach

Article excerpt

As I was researching this column on the data breach of the Equifax credit report service, a chilling headline phrase from a CBS News article struck me as quite telling: "Assume you are breached."

Data breaches by the hundreds have been a common part of the information industry landscape for over a decade-the 500 million hacked Yahoo accounts, the lost Veterans Affairs laptop, the hacks of Target and The Home Depot, the Ashley Madison hack of customer data, the dark web, etc.-so the announcement of yet another data breach didn't shake or surprise me. At least until I saw that headline.

Equifax is one of the three major companies that maintain credit report information on hundreds of millions of Americans. Creditors such as credit card companies, mortgage lenders, and automobile financing institutions report to Equifax on the loans and credit cards they are financing, as well as their account numbers, their amounts and payment history, and of course the personal information of the account holder. Equifax and the other two companies (TransUnion and Experian) compile that data by using common personal information such as name, address, age, and often Social Security number to create credit reports and a proprietary credit score for each person. When a person applies for credit, such as a credit card or an auto loan, the lender will obtain one of the credit reports from these companies, along with the score, and make its lending decision.

143 Million Customers

In a Sept. 7 press release (inves news/2017/09-07-2017-213000628), Equifax announced a "cybersecurity incident" that could "potentially" affect 143 million U.S. customers. The incident was actually a series of hacks that took place over a 2-month period from May to July 2017. Equifax reported that the "information accessed primarily includes names, Social Security numbers, birth dates, addresses and, in some instances, driver's license numbers." Credit card numbers were hacked for 209,000 customers, and Equifax acknowledged that an unknown number of U.K. and Canadian residents were hacked as well.

The public response was immediate and widespread. It became the lead story on many major news outlets and continued to be a lead or feature story for the weeks following. Equifax's stock price tumbled 33% in the first 10 days after the announcement. Consumers overwhelmed credit protection and reporting agencies, as well as the websites and services set up by Equifax to "help consumers determine if their information has been potentially impacted." Both the current administration and Congress weighed in. White House press secretary Sarah Huckabee Sanders said there would be an extensive investigation of the situation led by homeland security advisor Tom Bossert. Several members of Congress called for hearings, and Sen. Elizabeth Warren (D-Mass.) introduced a proposal that would allow consumers to freeze their credit on request at no charge.

Immediate and Widespread Lawsuits

As many as 50 class action suits were filed against Equifax in the first 10 days after the breach was announced. That number is likely to change as new suits are filed and existing suits are consolidated. In addition, the attorney general of Massachusetts announced intentions to sue Equifax for violating state consumer protection laws. Reportedly, as many as 40 other state attorneys general are also investigating whether Equifax broke their respective state consumer protection laws. …

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