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Home / Business / Equifax pays approximately $ 700 million for data breach testing solution

Equifax pays approximately $ 700 million for data breach testing solution



Equifax
Inc.


EFX -1.39%

is in the process of finalizing a deal to settle numerous state and federal investigations into a data breach in 2017 that has nearly 150 social security numbers Millions of Americans and other sensitive people revealed information.

Under the agreement, the credit bureau would pay around US $ 700 million to reach agreement with the Federal Trade Commission, the Consumer Financial Protection Bureau, and most of the attorney general, the persons familiar with the matter said. The agreement will also solve a nationwide class action for consumers, it said.

The comparison could be announced on Monday, it said. The amount eventually paid by Equifax could be shifted based on the number of consumer claims that will eventually be submitted.

The deal would eliminate a cloud hanging over Equifax since it revealed in September 201

7 that hackers have invaded its systems and gained access to consumer names, social security numbers, birth dates and addresses.

The hack of the largest consumer data breaches exposed major security holes in one of the country's largest credit bureaus, causing cybersecurity alerts among consumers and decision-makers alike. Hackers became familiar with Equifax systems due to a software bug that the company failed to patch. A flawed scan tool allowed hackers to spend months undetected on the company's network.

The reaction was fast. Within a few weeks, the long-standing CEO of the company retired. State and federal officials initiated a series of investigations. Legislators angered Equifax executives for having waited six weeks to disclose the hack after discovering suspicious activity and raising questions on how to handle their collected customer data.

Equifax and the other two major credit bureaus,

Experian

Plc and

TransUnion

Make lengthy financial dossiers to hundreds of millions of Americans holding their credit accounts and repayment histories.

You also have access to addresses, social security numbers, and other information required to apply for credit. These personal data have been stolen by hackers.

The security breach has highlighted how little control consumers have over their personal information and how it is shared. Much of Equifax's revenue comes from credit reports and other products sold to lenders who use the information to evaluate potential borrowers. Unlike hacks that affected consumers who shop at certain merchants or use specific websites, the Equifax violation affected millions of people who never dealt directly with the company.

The settlement would set up a compensation fund to compensate consumers for the infringement, according to those familiar with the case. A website and a call center would be set up to handle the claims, one respondent said.

The agreement would also require Equifax to make additional changes to the handling and protection of consumer data, respondents said. The company is well on track to spend around $ 1.25 billion on upgrading its security systems and upgrading technology. Multiple state regulators last year ordered the company to improve its information security protections, patches, and disaster prevention protocols.

Equifax is working to recover from the hack nearly two years after it was released. Sales of new products to lenders in the US and sales of consumer goods are down. The company has suspended share buybacks and frozen its dividend in 2017 to prepare for possible liquidation. Equifax announced in a filing in May that $ 690 million had been set aside to cover the costs of investigations and legal proceedings. Chief Executive Mark Begor told analysts this month that a global agreement was in the pipeline that would "cover many of the company's major issues."

The infringement exacerbated the control of the credit industry by Congress. Congress passed a law last year that prevents credit bureaus from charging fees to freeze and release credit reports.

Some legislators have called for stricter requirements for credit bureaus to remedy credit inaccuracies.

At the beginning of this year Begor said he had taken steps to make it easier for consumers to access and correct errors in their credit reports.

"Our culture is changing," Begor said. who testified together with the executives of TransUnion and Experian.

Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com

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