The Equifax cybersecurity breach that was announced Thursday and may have affected 143 million U.S. consumers’ personal information is sparking outrage in the financial services community.
House Financial Services Committee Chairman Jeb Hensarling announced Friday that he would hold a hearing, and Attorney General Eric T. Schneiderman of New York said he was launching a formal investigation.
Financial reform groups are also warning that the massive breach underscores the need to curb mandatory arbitration and oversee credit bureaus.
"Criminals exploited a U.S. website application vulnerability to gain access to certain files, Equifax said in a statement. "Based on the company’s investigation, the unauthorized access occurred from mid-May through July 2017. The company has found no evidence of unauthorized activity on Equifax’s core consumer or commercial credit reporting databases."
The information accessed primarily includes names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers.
In addition, Equifax said credit card numbers for approximately 209,000 U.S. consumers, and certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers, were accessed.
Hensarling, R-Texas, said that the Equifax breach was “obviously a very serious and very troubling situation and our committee has already begun preparations for a hearing. Large-scale security breaches are becoming all too common. Every breach leaves consumers exposed and vulnerable to identity theft, fraud and a host of other crimes, and they deserve answers.”
He said the hearing would be announced at a later date.
Amanda Werner, arbitration campaign manager for Public Citizen and Americans for Financial Reform, said in a statement that Equifax offers an identity monitoring service, TrustedID, “but buried in the terms of service for Equifax’s TrustedID Premier is a rip-off clause that blocks consumers from joining together in class-action lawsuits against the company.”
Schneiderman tweeted Friday he’s already told Equifax the anti-arbitration clause is “unacceptable and unenforceable” and to remove it.
Continued Werner: “It is despicable that Equifax would exploit consumers’ need for identity theft monitoring to avoid accountability for this devastating breach. Perhaps more despicable, at this very moment, U.S. senators are weighing legislation to take away our right to hold companies like Equifax accountable in court. Repealing crucial consumer protections as new financial scandals break every week would send a clear signal to bad actors like Equifax and Wells Fargo that they can continue to plunder consumers for profit.”
The breach, according to Schneiderman, could impact more than 8 million New Yorkers.
As part of a formal investigation into the incident announced by his office on Friday, Schneiderman said he sent a letter to Equifax seeking additional information about the breach.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
