It’s Curtains for Equifax
If you accidentally leak 145 million people’s personal information, expect to pay for it. That’s the memo from the Federal Trade Commission to Equifax (#equifax), as it pounds a $700 million fine on the table. Gulp.
Equifax is a customer credit reporting agency. That means it hoovers up as much information about your spending habits as it can, tracking not only your payments but your credit usage, too. It packages it all up, ties it neatly with a ribbon, and then sells it off to a bank so it can decide whether to grant you a loan or not. Sounds peachy! Only, in 2017, it all went horribly wrong. All of that information fell into the wrong hands, Equifax slipping on the biggest banana skin in history after hackers infiltrated its shoddy security.
In the aftermath, investors abandoned the stock as it went off a cliff edge. The market feared the world would never trust Equifax again, and only this year’s recent rally has clawed back at that sentiment. Customers scrambled, the CEO resigned, and the Federal Trade Commission (FTC) went bright red. Although this cyber lapse had been compared to other oopsies from Yahoo in 2014, Target (#target) more recently, and MySpace, Equifax takes the biscuit! Investors felt this one!
Market participants who stuck with their credit reporting agency have waited two long years for a sentencing from the FTC, and here it is. Shareholders will go home with almost an entire year’s revenue docked, the Chairman of the government agency accusing Equifax of “failing to take basic steps” to prevent the screw-up. So, another reminder of the rogue threat cybersecurity poses to our market! It’s Equifax today, but tomorrow, who knows?
