Equifax’s 2017 breach will cost it billions in fines, customer restitution and mandated and voluntary security improvements. All organizations that profit from consumer data should take notice.
Equifax announced on Monday that it has agreed to a record-breaking settlement related to its massive 2017 data breach, which exposed the personal and financial records of more than 148 million people. The settlement requires the beleaguered credit ratings agency to spend at least $1.38 billion to resolve consumer claims against it. It creates a non-reversionary fund of $380.5 million to pay benefits to the class of consumers harmed by the breach, including cash compensation, credit monitoring, and help with identity restoration.
The settlement also requires Equifax to spend another $125 million for cash compensation and potentially much more if the number of class members who sign up for credit monitoring exceeds 7 million. The company will further pay $175 million in fines to settle state attorneys’ general investigations and $100 million to resolve probes by the Consumer Financial Protection Bureau and the Federal Trade Commission (FTC).
Finally, Equifax must also spend $1 billion over the next five years to improve its data security. That’s on top of the $1.25 billion in security and tech investments Equifax said it has made since the breach occurred.
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