Tag Archives: Equifax

Debt-Slave Industry Frets over Impact of Mass Credit Freezes, by Wolf Richter

Posted on September 30, 2017 | Leave a comment

If a significant portion of the 143 million people whose records were compromised in the Equifax hack institute credit freezes, it could bring our whole debt-based economy down. From Wolf Richter at wolfstreet.com:

Their doom-and-gloom scenario: Consumers suddenly becoming prudent.

“Let’s face it, 143 million frauds won’t be perpetrated right away; it will take some time to filter through,” Steve Bowman, chief credit and risk officer at GM Financial, the auto-lending subsidiary of General Motors, told Reuters.

He was talking about the consequences of the Equifax hack during which the most crucial personal data, including Social Security numbers, of 143 million American consumers along with equivalent data of Canadian and British consumers, had been stolen. These consumers have all at once become very vulnerable to all kinds of fraud, including identity theft – where a fraudster borrows money in their name.

The day Equifax disclosed the hack, I urged affected consumers to put a credit freeze on their credit data at the three major credit bureaus — Equifax, TransUnion, and Experian — to protect themselves against these frauds. Soon, the largest media outlets and state attorneys general urged consumers to do the same thing. Financial advisors are recommending it. Even Wells Fargo jumped on the credit freeze bandwagon.

As a result, consumers have flooded the websites of the three credit bureaus to request credit freezes in such numbers that the sites slowed down, timed out, or went down entirely for periods of time. This credit freeze frenzy is scaring the credit industry – not just the credit bureaus, but also lenders and companies that rely on easy credit to sell their wares, such as automakers and department stores with instant credit cards.

With a credit freeze in place, those consumers cannot be approved for new credit until they lift the credit freeze, which can take up to three business days. The time and extra hoops to jump through before applying for a new loan might deter consumers from buying that car at the spur of the moment.

To continue reading: Debt-Slave Industry Frets over Impact of Mass Credit Freezes

 

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Holy Moly, Now Wells Fargo Recommends a Credit Freeze in Equifax Hack, by Wolf Richter

Posted on September 17, 2017 | 2 comments

Credit being the life blood of the US economy, if credit freezes up because of the Equifax fiasco, it could well have knock-on economic effects. From Wolf Richter at wolfstreet.com:

Third largest US bank reaches out to its customers. A mass credit freeze would have a huge impact.

No one knows yet how the Equifax hack – during which Social Security numbers, birth dates, addresses and, “in some instances,” driver’s license numbers of 143 million consumers had been stolen – will wash out for Equifax, or for the other credit bureaus.

But it increasingly looks like a far bigger and broader mess not only for the credit bureaus but for the overall consumer-based US economy whose grease is easy and often instant consumer credit.

People are trying to put a credit freeze on their data at the three major credit bureaus to protect themselves from identity theft. Victims of identity theft get caught in years of a Kafkaesque nightmare where debt collectors hound them for debts incurred in their name by someone else.

A credit freeze is the best protection against identity theft. It has now been recommended by State Attorneys General, the US Government, the biggest mainstream media outlets, and numerous other outfits including from the first moment on – the evening of September 7 when the hack was disclosed – my humble site. In over 400 comments on my three articles (here, here, and here), readers have shared tips and frustrating experiences trying to deal with overloaded websites that crashed, sent people in wrong directions, or failed in other ways to produce results.

The credit bureaus claim that they have staffed up their call centers, beefed up their websites, etc. etc. But it’s still a mess. And it has been going on for ten days!

So we know there is a surge of consumers trying to protect themselves by putting a credit freeze on their data at the three major credit bureaus. But only the credit bureaus know the actual number. And they keep it close to their vest.

Now even Well Fargo, the third largest bank in the US by assets, posted an “Equifax Alert” on its customer login-page. This is the page millions of customers see when they log into their accounts.

To continue reading: Holy Moly, Now Wells Fargo Recommends a Credit Freeze in Equifax Hack

 

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Equifax Sacks 2 Executives, Turns Devious to Stop You from Demanding a Credit Freeze, by Wolf Richter

Posted on September 16, 2017 | Leave a comment

More on how to protect yourself after the massive Equifax security breach. From Wolf Richter at wolfstreet.com:

Shares of Equifax dropped another 4% today, including after-hours, to $92.70. They’re now down 35%, or $50, from the happier era that ended at 5pm EST on September 7, with the confession that it had found out six weeks earlier that the most crucial personal data – “primarily names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers” – of 143 million consumers had been stolen.

This was promptly followed by chaos and egregious missteps, such as trying to profit from its victims. So far, at 120.4 million shares outstanding as of June 30, the six trading days have cost investors $6 billion. No one cares about consumers. They’re just the product. But $6 billion matter.

Now heads are rolling. Oh no, not CEO Richard Smith. He is notleaving the company to spend more time with his family. Instead, Equifax announced Friday evening that it sacked two lower level executives. I mean, not sacked. Chief information officer, David Webb, and chief security officer, Susan Mauldin, “are retiring,” it said, “effective immediately.”

And they had it coming.

Much was made of Mauldin’s degrees in music. But for a person her age, and with as much corporate experience as she had, college is irrelevant. Gates, Jobs, and Zuckerberg didn’t even graduate from college. What matters is how they perform their work.

And they failed to patch a vulnerability in Apache Struts, an open-source and therefore free software. The vulnerability had been “identified in early March” but wasn’t patched. The hack occurred from May 13 through July 30, 2017.

According to Equifax Friday evening:

The attack vector used in this incident occurred through a vulnerability in Apache Struts (CVE-2017-5638), an open-source application framework that supports the Equifax online dispute portal web application.

Equifax’s Security organization was aware of this vulnerability at that time, and took efforts to identify and to patch any vulnerable systems in the company’s IT infrastructure.

While Equifax fully understands the intense focus on patching efforts, the company’s review of the facts is still ongoing.

To continue reading: Equifax Sacks 2 Executives, Turns Devious to Stop You from Demanding a Credit Freeze

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The Crushing of Equifax, by Wolf Richter

Posted on September 14, 2017 | Leave a comment

The last week has not been kind to Equifax, the credit reporting agency that had 143 million consumer profiles stolen. From Wolf Richter at wolfstreet.com:

Banks, credit card companies, and other Equifax customers squeal. Consumers (the product) squeal. Congress squeals. Investors squeal.

Equifax shares dropped another 16% during the day and after-hours on Wednesday to $97.51. They’ve now plunged 31%, or $44.82, in the four trading days since Equifax confessed that 143 million consumers had their data crown-jewels stolen when it was hacked. The stolen data is perfect for identity theft, such as getting a loan in your name, and tax fraud, such as getting a tax refund from the IRS in your name, with Kafkaesque consequences for you.

Investors, seeing what this might do to the company, have voted with their sell-button. Based on the 120.4 million shares outstanding as of June 30, the four-trading-day loss amounts to $5.4 billion.

The stink has been enormous, with Equifax having to back down from some of its most egregious solutions to this problem, including forcing consumers to give away their legal right to sue in order to sign up for its credit protection services. Buckling under scathing criticism, Equifax rescinded this requirement over the weekend.

Equifax will still try to twist this offer of “free” credit protection into a profit opportunity. Once your social security number, date of birth, and other data that hackers obtained is out there, you’re vulnerable to identity theft for the rest of your life, and you need to protect yourself for the rest of your life. But Equifax is just offering the first year for free, hoping that you’ll continue the service and pay its annual fee for the rest of your life.

Dozens of lawsuits have already been filed. Equifax will be attacked from all directions, including shareholder class-action lawsuits and consumer lawsuits. Congress has gotten interested in it, and two committees are planning hearings.

But the Wall Street hype continues. All 16 analysts tracked by Bloomberg that follow Equifax have either reiterated their bullish rating on the company, or have not altered their rating, and some have exhorted their clients to buy more.

JP Morgan Chase analyst Andrew Steinerman said that based on his conversation with Equifax executives, the financial impact would be isolated to the company’s business-to-consumer segment, which accounts for about 7% of total revenue. Based on the revenue consensus of $3.40 billion for 2017, it would impact only about $238 million in revenue, according to MarketWatch. So no big deal?

To continue reading: The Crushing of Equifax

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