Equifax to pay up to $700m to settle data breach
Credit score agency, Equifax, has agreed to pay up to $700 million as part of a settlement with a US regulator following a data breach in 2017, according to a report by the BBC.
The Federal Trade Commission (FTC) had alleged the Atlanta-based firm failed to take reasonable steps to secure its network. The records of at least 147 million people were exposed in the incident.
At least $300 million will go towards paying for identity theft services and other related expenses run up by the victims. This sum will expand to a maximum of $425 million if required to cover the consumers’ losses.
“Equifax failed to take basic steps that may have prevented the breach,” said the FTC’s chairman Joe Simons.
“This settlement requires that the company take steps to improve its data security going forward and will ensure that consumers harmed by this breach can receive help protecting themselves from identity theft and fraud.”
The rest of the money will be divided between 50 US states and territories and a penalty paid to the Consumer Financial Protection Bureau (CFPB).
It represents the FTC’s largest data-breach settlement to date, topping a $148 million penalty Uber agreed to last year.
The agency added that among the stolen information, the hackers copied: at least 147 million names and dates of birth, about 145.5 million social security numbers, and a total of 209,000 payment card numbers and expiration dates.
The UK’s Information Commissioner’s Office has already issued the company with a £500,000 fine for failing to protect the personal information of up to 15 million UK citizens during the same attack.
Equifax had been warned in March that one of its databases – the Equifax Automated Consumer Interview System (ACIS) – suffered from a critical vulnerability, according to the FTC statement.
The ACIS was used by members of the public to check their own credit reports. But because of the way that Equifax’s IT systems had evolved, it also provided a means for hackers to access other unrelated records stored by the firm.
The FTC alleged that Equifax’s security team ordered that the vulnerable systems be patched within 48 hours after being informed of the discovery in March 2017.
The watchdog added that the firm failed to check that this was done, and that as a consequence, hackers were able to exploit the flaw and steal consumers’ personal details over a period of several months.