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Massive Data Breach Cost Equifax Nearly $90m
Massive Data Breach Cost Equifax Nearly $90m

Massive Data Breach Cost Equifax Nearly $90m

Massive Data Breach Cost Equifax Nearly $90m

A massive security breach that hit Equifax has cost the US credit bureau nearly $90 million so far, a figure that is set to rise further, its chief financial officer said.
The company, which gathers data on consumers to help lenders determine borrowers’ creditworthiness, revealed in September that hackers had stolen the personal details, including names, dates of birth and social security numbers, of nearly 146 million people, France24 reported.
In the third quarter, “we incurred a one-time charge related to the cyber security incident of $87.5 million,” John Gamble said during a conference call on quarterly results.
Equifax is forecasting between $60 and $75 million in spending that will include information technology security in the fourth quarter, he said. In addition to the expenses, the group’s earnings have also been affected, particularly due to customer dissatisfaction, Equifax said.
Its net income fell 27% to $96.3 million in the third quarter.
Equifax also said in a document sent to the US Securities and Exchange commission that it is the subject of 240 class-action lawsuits in the US and Canada as well as more than 50 investigations in the US, Canada and Great Britain. It did not quantify the possible financial impact of the lawsuits.
Equifax says it cannot yet estimate damages and fines, but there are likely to be some of both. Although overall revenue was up in the third quarter, sales in its biggest division, which handles American consumer credit reports, fell 3%. That was a sharp turnaround from 7% growth in the first half, considering that the breach was made public only on Sept. 7.
To give that result, the unit’s revenue in the last three weeks of the quarter would have had to slump by about a third from what was expected, according to Breakingviews calculations. Executives expect overall revenue to decline by 3 to 4% in the fourth quarter as customers defer more orders.
Equifax interim CEO Paulino do Rego Barros said that following the security breach, its senior leadership will not receive bonuses this year.
Its CEO Richard Smith resigned in late September, as did two other Equifax executives, its chief information officer and chief security officer.

 

 

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