Data Breach Settlement: Equifax to Pay $700 Million

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Equifax will pay up to $700 million in a proposed settlement over its massive 2017 data breach.

Equifax, which is one of the three largest credit-reporting firms in the United States, has been ordered to pay a fine of up to $700 million in order to settle a series of state and federal investigations into the massive data breach of 2017 that had exposed the personal and the financial data of nearly 150 Americans that accounts to almost half the country. As per the official announcement by the U.S. Federal Trade Commission (FTC) today, it has been coming to notice that Equifax has agreed to pay some of the fine (at least $575 million), but this has been confirmed that the penalty could go up to $700 ,million depending upon the amount of compensation people claim.

It has been stated that up to $425 million of the fines will go to a fund that will provide credit monitoring services to the affected customers and compensate anyone who bought such services from the company and as well as paid the other related expenses as a result of the breach. The remaining $175 million and $100 million will go to the civil penalties across 50 states and to the Consumer Financial Protection Bureau (CFPB), respectively. Apart from the penalty, Equifax has also been ordered to provide all the American Consumers with six free credit reports each year for seven long years along with the one free annual credit report and will be starting from January 2020.

In September of 2017, Equifax has suffered a massive data breach that has permitted the hackers to steal personal information that includes names, birth dates, social security numbers, addresses and also in some cases, driver’s license numbers of nearly 147 million people. The breach that has been called one of the worst in American history, occurred due to the failure of the company Equifax in the bid to patch critical security vulnerability in its systems, it was made aware of in March the same year.

As a matter of fact, Equifax did not even realize its unpatched database until July 2017, when the security team of the company detected suspicious traffic on its network. An investigation on the same has revealed that multiple hackers have managed to exploit the vulnerability to gain entry to the network of Equifax. Attaining access to the network of Equifax has permitted the hackers to access an unsecured file that included administrative credentials stored in the plain text that eventually let them gain access to consumers’ personal data and also operate undetected on the network off Equifax for a month.

The FTC has set up a dedicated page on its website in order to provide information to customers who want to make a claim against Equifax. Even, the commission has set up a dedicated email – Equifax@ftc.gov – encouraging Equifax employees to mail FTC whether they believe the company is failing to adhere to its data security promises. In the past year, the UK’s Information Commissioner’s Office (ICO) has also fined Equifax with £500,000 (over $622,000)—that’s the maximum fine allowed by the UK’s Data Protection Act 1998—for the 2017 data breach.

Source: The Hacker News


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