Equifax is a consumer credit reporting agency. The company collects and stores information on individual customers and businesses worldwide. The information then provides consumer credit reports about personal credit and payment histories. FICO credit scores can range from 300 – 850 with higher scores being better. Equifax, Transunion, and TransUnion, are collectively known as the “Big Three” credit rating agencies. All of which, have been subject to lawsuits and consumer complaints in the past. But, the data breach that occurred on July 29, 2017 is on a scale never seen before in the industry. An estimated 143 million Americans have had their personal information stolen.
As Equifax braces itself for the coming multi-billion-dollar lawsuit(s), new details emerged about top executives at the company attempting to limit exposure in lawsuits in the months and years prior. Investigators are also looking into stock sales by top executives that may have occurred before the breach was made public. The latest report indicates that Equifax spent over $1 million last year lobbying and over $500,000 so far in 2015. The company was focused on lobbying to set limits on how much consumers could recover if they sued Equifax. Since 2015, the agency has also lobbied surrounding issues of “data security and breach notification”. As the Equifax lobbyists put it, they were interested in getting legislation past that would “strike a fair balance” between penalties and obligations to consumers.
These amounts and details surrounding the timing of these lobbying efforts came at an ironic time. Republican Rep. Barry Loudermilk announced the fair balance proposals at a hearing on September 7th. Later that afternoon news broke of the 143 million American’s leaked data. Further details of the investigation have revealed that Equifax used ‘admin’ as the password for one of its databases. Such facts are making many Americans wonder how safe and private their personal information really is.
Massachusetts Senator, Elizabeth Warren, has already taken aim at cracking down on the credit bureaus with legislation to give control of credit information back to consumers. Senator Warren is known to be a staunch advocate for tightening regulations on big business. In June, Equifax competitor, TransUnion, was hit with a jury verdict of more than $60 million for not taking reasonable steps to prevent consumers from being wrongly identified as criminals or terrorists. After this failure to secure private information, many analysts believe that upcoming regulation will weigh in favor of protecting consumers.
Historically, the credit rating agencies have been subject to complaints and lawsuits revolving around mistakes in their reports that have been difficult to correct. The implication for these errors can be massive and can affect their ability to finance a loan, automobile or even a home. As economies of scale continue to pave the way for larger and larger businesses, class action lawsuits are likely to become more common. Keep an eye out in the news for these lawsuits as you may be a member of the damaged class and entitled to damages.