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Equifax Puts Americans at Risk for Fraud

Written by Monica Savaglia
Posted September 12, 2017 at 5:21PM

Today you probably logged into your bank account. As you typed in your password, I bet you didn’t think twice about the personal information that resides in the account.

Every day you log into your accounts for your bank, credit cards, emails... the list goes on.

Signing into these accounts is something we need to do. It’s a normal task we do every single day, like driving to and from work. We don’t take into account that we are trusting companies with some of our most sensitive information.

We never think that our personal information could be compromised... until it happens.

This past Thursday, Equifax (NYSE: EFX) announced that it was victim to a massive data breach that left almost half of the American adult population’s data at risk.

Investors weren’t too happy about the news of the attack, and that showed the next day when Equifax’s shares plummeted by 18%.

The company is saying the data breach happened between mid-May and July, which puts about 143 million Americans in a vulnerable position.

Apparently Equifax discovered the breach on July 29th, leading it to the conclusion that the hackers exploited a vulnerability in its website application that allowed the criminals to access files, which included names, addresses, birth dates, over 200,000 credit card numbers, Social Security numbers, and driver’s license numbers.

Equifax is one of three credit reporting agencies in the U.S. Americans don’t have many options when it comes to obtaining their credit reports.

I signed a new lease for an apartment back in April, and I needed an updated credit report  I had no choice but to use one of the three credit reporting agencies in the country so my potential landlord could see I was a worthy and capable tenant. 

Our credit and credit scores are very important. Whether we like it or not, it's a huge part of what defines us in society. If our credit or identity is compromised, it's our responsibility to clean it up because our lives depend on it as much as having a place to call home.

More and more data breaches continue to happen, and it's been happening to large companies like Equifax, Target (NYSE: TGT), Yahoo, eBay (NASDAQ: EBAY), and Marriott International (NASDAQ: MAR). These are such large companies that we tend to feel somewhat secure when we’re giving them our personal data.

But both companies and the public are facing a really big reality check: that our personal data might not be as safe as we think it is. 

Rep. Jeb Hensarling, chairman of the House Financial Services Committee, announced on Friday, September 8th that there will be a future hearing to discuss Equifax’s data breach.

Hensarling had this to say:

This is 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.

No one wants to feel like they've lost control of their own information, which is why we need to demand better solutions from these companies. 

What Happens If Your Identity Is Stolen?

It’s hard to bounce back from identity theft  it can ruin your finances and even your reputation, and that’s the ugly truth about the situation.

Even if it could be a company’s fault, it’s ultimately your responsibility to keep an eye out for your credit.

You will be the one who has to disprove to your bank and to the government that what was done in your name by a criminal wasn’t actually you and that you were a victim of fraud.

Mark Nunnikhoven, head of cloud research for cybersecurity firm Trend Micro, said this about recovering from identity theft:

It becomes a game of ‘he said, she said’… The good news is you know all of your own history, and this breach is so well known and far reaching that if you are a victim, it should be easier than usual to fight.

However, that’s not always the case. If there’s anything these recent hacks have proved, it’s that we can’t keep hoping for the best when it comes to our personal data. We can’t put all of our trust into companies to protect our information.

Now more than ever is the time for Equifax to step up its efforts to improve its cybersecurity. As a business, it's asking for the personal information of millions of people, which means the company needs to work really hard to protect that precious data.

The Aftermath for Equifax

No company can afford for its brand reputation, credibility, and business to be tarnished. And, unfortunately, that’s exactly what’s happening to Equifax...

The data breach has already taken a huge toll on Equifax’s investors  its market value has decreased by $3.5 billion.

Its stock is at a nine-month low. As I mentioned earlier, the company’s shares plummeted 18% after the news broke out, and they continue to plummet, closing Monday out with $113.12  a 8.7% decrease from Friday's close. 

The company has been experiencing a lot of scrutiny from cybersecurity firms — they've been questioning Equifax's level of preparedness and its response to the data breach, and they believe Equifax should have told the public a lot sooner. 

In addition to that backlash, even more interesting news has surfaced. Equifax's chief financial officer and two other senior executives apparently knew about the data breach long before it was announced last Thursday, and they decided to cash in on almost $2 million of Equifax's stock.

With everything that is unfolding, it's going to be difficult for Equifax to turn things around and regain the trust of the American people.  

Until next time,

Monica Savaglia
Wealth Daily

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