Equifax Reveals Almost $90M Cost after Data Security Breach, Might Spend More

From the latest statement of Equifax, it revealed that the extent of the massive security breach cost the company almost $90 million and they are still investigating the problem continuously.

The popular US credit-reporting agency revealed such lost on Thursday.

According from the reported news through AFP, Equifax (EFX) already revealed the amount it lost from the recent massive security breach it encountered. As stated by the company’s chief financial officer, he said on Thursday that the amount of cost is almost $90 million.

However, such estimated figure can go up because of the ongoing investigation.

The problem arises last September when the US-based credit bureau encountered unknown hackers who penetrated their database and stole personal information from almost 146 millions of citizens of the United States. The involved data or information are from their millions of consumers and nearly jeopardized those people who own the hacked information.

The company that time immediately notified those affected consumers.

From the statement of John Gamble during a conference call to talk about the results of the quarter performance of Equifax specifically for the third quarter, the company incurred a one-time payment amounting to $87.5 million due to the security breach online, as detailed by the reported news.

It is possible that the US-based credit reporting agency that it needs to spend around $60 and $70 million in the coming fourth quarter in an effort to have the best security for its information technology.

According to Equifax, the earnings of the group felt the massive data breach because of the increasing numbers of the not satisfied consumers to the incident. Based on recorded statistics of the company’s earning for 3rd quarter, it only gained $96.3 million and this is 27% lower than its previous earnings.

In addition to the lost and huge spending, the company is also facing hundreds of class-action legal cases in America as well as in Canada, which it stated on the document forwarded to the US Securities and Exchange Commission. Likewise, it has over 50 ongoing investigations in Canada, UK and in the United States.

However, Equifax did not disclose any information about the impact of the legal cases on its finances.

The company is somehow used to experiencing an adjusted earning and this is usual to other businesses or companies worldwide. On the other hand, the issue about security breach truly affected the overall performance EFX, particularly in getting the trust of their consumers back.

As reported through Morningstar.com, the released data of the third quarter earnings of the company on Thursday revealed that it spent around $27.3 million ($17.1 million for professional fees and $10.2 consumer support) due to the data breach last September 30, 2017 alone.

Equifax likewise needed to shell out almost $4.7 million for the acquired services (credit-monitoring and identity theft-protection) to provide the best security to all its valued consumers. Furthermore, it revealed that it total spending may reach about $56 to $110 million until January 31 next year.

Back in September, cnbc.com already reported that at least three top executives of the company had sold their shares (amounting to $2 million) a couple of days after learning about the massive security breach. These executives include John Gamble Jr. (Chief Financial Officer), Joseph Loughran (US Information Solutions President) and Rodolfo Ploder (Workforce Solutions President).

There is however no clear explanation if the breach has something to do with their decision.

Based on the reported news, the hacked personal information of the consumers include their dates of birth, names, home addresses, Social Security numbers and driver’s license numbers.

This is aside from the almost 209,000 hacked credit card numbers from the citizens of America.

Due to this issue, the interim CEO of the company revealed that they will not release bonuses the senior leadership of Equifax.

 

Credit image: Reuters