In Case You Missed It…

On Sept 7, 2017, Equifax announced they were victims of a security breach. In case you missed the news, you can learn all about it on our First Post this week. If you are concerned you may be affected, you can find out more on our Thursday post.

Change in Leadership

Their CEO at the time of the hack, Richard Smith, stepped down on Tuesday Sept 26. Interim CEO Paulino do Rego Barros Jr. released a statement through the Wall Street Journal. He clearly apologizes, addresses some concerns, and outlines his plans to correct course going forward.

Paulino do Rego Barros Jr. pledged to improve the service at call centres, increase hiring and training. In addition, he vowed to introduce a free service by Jan. 31 that will let consumers control access to their own credit records. This is a new approach for the company, which is now encouraging active credit management for their consumers.

Equifax has also promised free credit locking for life- to those in the United States.  No word yet on any new plans for Canadians. “These new services do not apply to Canadian consumers.” a spokesperson with Equifax Canada told CBC News. “Equifax Canada is offering complimentary credit monitoring for one year, as well as identify theft monitoring, for Canadian consumers impacted by the breach.”

Possible Legal Risks

Three Equifax executives, including its chief financial officer, John Gamble Jr., sold $1.8 million (U.S.) in company shares in the days after the breach was discovered, but before it was publicly disclosed. (Equifax has said the executives were unaware of the breach at the time of the stock sales.) Regulatory filings don’t show that the transactions were part of pre-scheduled trading plans.

The three “sold a small percentage of their Equifax shares,” Ines Gutzmer, a spokeswoman for the Atlanta-based company, said in an emailed statement. They “had no knowledge that an intrusion had occurred at the time.”

Gamble sold more than 13 percent of his stake in Equifax. Loughran sold 9 percent of his holdings and Ploder disposed of 4 percent.

The probe will be handled by the U.S. attorney’s office in Atlanta where the credit firm’s headquarters is located, said one of the people.  A spokesman for the U.S. attorney’s office in Atlanta declined to comment on the investigation into share sales, but confirmed an inquiry into events surrounding the hack.

Here to Stay

Many within the industry expect the company to weather the storm. Experts figure it is highly unlikely that any regulatory body would shut Equifax down over this breach. It is likely to be considered too central to the American financial system, despite the negative press.

“Smaller companies have more of an existential concern,”said Steven S. Rubin, a lawyer who specializes in cybersecurity law at the firm Moritt Hock & Hamroff. “When a small law firm or accounting firm loses people’s data, they’re going to be in big trouble, because you can go down the street and find someone else.” Equifax doesn’t have competition of comparable size, and may be considered “too big to fail.”

Going Forward

We will all spend the next few years watching this unfold. There is no magic remedy that will re-secure everyone’s information. Once the cat is out of the bag, there is only so much we can do to protect ourselves. Anyone affected faces the possibility of having fraudsters apply for credit in their name. They would have to alert their various financial services providers and possibly even apply for a new social insurance number.

We live in the age of big data. There are going to be hacks again in the future. Social Security is not secure. Millions of people were affected by what was described as a “relatively easy hack.” The only solution is to remain vigilant. By taking an active roll in managing your credit, you can ensure that you will be aware of any suspicious activity. Once you are aware, you can then take the proper steps the rectify the situation.

Calling RECI enables you to work with credit experts to re-establish your score. We advocate on your behalf to to fight errors on your credit reports. Let’s climb you back in a healthy financial standing. Give us a call, visit our help page, or message us via Facebook, and we will be happy to help you master your credit.