Data breaches are becoming an increasingly common phenomenon among major companies, a problem which is costing billions in damages, share prices, and even fines from federal courts.
Equifax faces $700 million fine for colossal data breach
That is exactly what happened to Equifax (NYSE: EFX), one of the top credit-reporting firms in the U.S., which saw a severe data breach back in 2017 leak over 150 million social security numbers and other personal information.
Today, the company is finally moving to a settlement with the courts which would see the company pay a hefty $700 million fine with the Federal Trade Commission (FTC).
The Wall Street Journal reported on the story just before the weekend and detailed how Equifax will pay a hefty sum in order to resolve what has been a nationwide consumer class-action lawsuit against the company. Anonymous sources familiar with the matter said that the settlement could be announced as soon as Monday.
The hack in question, which was among the large consumer-data breaches in history, exposed over 150 million names, social security numbers, birth dates, and addresses. Since then, the incident has gone to reveal just how vulnerable some of the country’s top company’s security systems are.
Additionally, it led to a surge of interest in the cybersecurity realm as experts scrambled to understand how hackers were able to work their way through the company’s systems. It was revealed they accomplished this through a software flaw that the company had failed to patch, while a malfunctioning scanning tool let hackers roam undetected in Equifax’s network for months before getting caught.
Within weeks of the incident, Equifax’s long-time CEO resigned as investigations on both the state and federal level were issued against the company. Since then, the company is on track to spend an extra $1.25 billion shoring up its cybersecurity systems to ensure this doesn’t happen again.
At the same time, various committees in Washington have called for tighter requirements on credit-reporting firms to fix potential errors in credit reports, with Congress passing legislation last year that prevented these companies from charging fees to freeze and unfreeze credit reports.
While the Equifax’s current CEO, Mark Begor, told analysts that “our culture if shifting” and that this settlement would cover “many of the significant issues facing the company,” time will tell how effective these measures will be.
Shares of the credit-reporting company fell by 1.4 percent in response to the news, a relatively minor decline for what has been a significant scandal for the company.
Over the past six months, however, the story is much different, as the stock has risen steadily from around $100 per share almost $140 per share. While the company saw its shares drastically tumble when the news came out, Equifax has staged an impressive recovery since then.
Equifax Company Profile
Equifax is one of the leading credit bureaus in the United States, providing the consumer information that is the basis for granting credit. The company also provides database management, fraud detection, marketing, business credit, and analytical services. About a fourth of the company’s revenue is generated outside the U.S. – Warrior Trading News
