Major data breaches continue to be a problem plaguing financial services and major tech companies across the world. Even relatively minor leaks lead to millions of compromised accounts and social security numbers getting released.
Capital One Data Breach
That’s exactly what happened on Monday, as one of the world’s largest financial services companies admitted that a massive data breach took place. Capital One (NYSE: COF) announced today that over 100 million people had their personal information hacked.
The hacker responsible for the incident managed to get information including credit scores and balances, alongside the social security numbers of around 140,000 customers and 80,000 bank account numbers from said credit card customers.
While Capital One couldn’t say with certainty whether the leaked data was used for fraudulent purposes, they did admit they were aware of the hack back on July 19th but kept their customer sin the dark until July 29th before letting them know. During that time, the company sought help from law enforcement in handling the matter.
“While I am grateful that the perpetrator has been caught, I am deeply sorry for what has happened,” said Richard D. Fairbank, Chairman and CEO, in a statement. “I sincerely apologize for the understandable worry this incident must be causing those affected and I am committed to making it right.”
This news follows another major incident, where Equifax revealed that hackers managed to access the personal information of over 147 million people, which led to a massive settlement of up to $700 million, with $425 million going to relief to those who had been affected.
Other data breach scandals include the Cambridge Analytic incident with Facebook, which saw the former illegally access around 87 million Facebook users’ personal data. That particular case ended up costing Facebook $5 billion when the Federal Trade Commission fined the social media giant for the breach.
As such, it’s reasonable to expect that Capital One will have to pay a significant amount in a settlement as well, likely a little bit less then what Equifax paid but still a significant sum. In proportion to the number of people affected by the breach, it wouldn’t be shocking for Capital One to pay around $500 million in fines at the least.
Shares of the $46 billion-dollar company fell by over 5 percent in after-hours trading in response to the news as investors around the world reacted in dismay. Over the past six months, the credit card company has seen its stock price rise significantly, gaining 20 percent since January.
Today’s drop has already seen a couple months worth of gains wiped out in a matter of hours. As data breaches continue to remain a reality, investors are going to have to come to terms with the fact that these massive incidents aren’t going to go away anytime soon.
Capital One Company Profile
Capital One is a diversified financial services holding company offering a broad spectrum of financial products and services to consumers, small businesses, and commercial customers through a variety of delivery channels. Capital One serves commercial and consumer banking customers through branches in New York, New Jersey, Texas, Louisiana, and Virginia. – Warrior Trading News
