Senator rips credit-monitoring company Equifax for profiting off breach that exposed 145 million customers to potential fraud
(Common Dreams, by Julia Conley)The former CEO of Equifax, the credit reporting agency that admitted a security breach had exposed millions of customers to potential fraud and identity theft, faced sharp criticism from Sen. Elizabeth Warren (D-Mass.) at a Senate hearing on Wednesday—while in the audience, a representative of two watchdog groups was in costume to send a message about the company’s unfair business practices.
A person dressed as the “Monopoly Man,” complete with a monocle, top hat, and mustache, was sent by Public Citizen and Americans for Financial Reform to satirize Equifax and its now-retired CEO, Richard Smith, who testified about the company’s data breach as well as its forced arbitration clause.
Forced arbitration clauses are included in the “fine print” of some contracts, including Equifax’s customer agreement; when customers sign up for Equifax’s credit services, they waive their right to file a lawsuit.
— Public Citizen (@Public_Citizen) October 4, 2017
Meanwhile, Warren rebuked Smith for a talk he gave in August in which he called fraud “a huge opportunity for the company,” suggesting that the breach of 145 million Americans’ personal data may have benefited Equifax.
“So the breach of your system has actually created more business opportunities for you,” Warren said pointedly. “Equifax did a terrible job of protecting our data, because they didn’t have a reason to protect our data.”
Warren also expressed anger over Equifax’s attempts to reap even more direct benefits from the breach by offering a year of free credit monitoring to customers, only to begin charging for the service after the year was up. (After an uproar, the company said it would allow users to sign up for the free year without providing credit card information which would have allowed Equifax to charge them automatically.)
The issue of monopoly came up again in questions about Lifelock, another credit report service which has seen a huge increase in business since the breach was announced in September—but which contracts work to Equifax. Warren summed up the impact the company has had on its customers’ lives.
“Because of this breach, consumers will spend the rest of their lives worrying about identity theft. Small banks and credit unions will have to pay to issue new credit cards,” she said. “Businesses will lose money to thieves. But Equifax will be just fine―heck, it could actually come out ahead. Consumers are trapped. There is no competition, nowhere else for them to go. If we think Equifax does a lousy job protecting our data, we can’t take our data to someone else.”
Warren introduced a bill last month to bar companies like Equifax from profiting off of data breaches. The Freedom from Equifax Exploitation Act has 11 co-sponsors so far.