"Humbled" Equifax CEO Explains Why Company Hesitated To Disclose Massive Data Breach

Tyler Durden's picture

Two days after Equifax revealed that hackers had stolen the sensitive information of more than 143 million customers, prompting a deluge of lawsuits from outraged consumers alleging everything from negligence to outright fraud, the credit-security company’s CEO Richard Smith has chosen the op-ed pages of USA Today – America’s largest circulation newspaper – as the venue for a platitude-laden apology that we imagine will provide scant comfort to individuals who are now having their identities “repurposed” for all manner of nefarious purposes.

“This is the most humbling moment in our 118-year history,” Smith wrote “…because of the concern and frustration this incident has created for so many consumers.”

However, Smith deserves some small measure of credit for addressing the most pressing question, and what is tantamount to the company’s defense against the lawsuits alleging securities fraud. Following disclosures that several of the company’s executives, including its CFO, exercised options and sold stock worth $2 million in early August, just days after the company said it first learned about the breach. Previously, a company spokesperson said that the executives who cashed out had no knowledge of the breach.

Aside from the deluge of lawsuits, the company will probably face several federal investigations. Inquiries led by at least two Congressional committees appear likely. The public outrage has prompted lawmakers, including Virginia Democrat Mark Warner, to demand that the FTC pursue an investigation. On Monday, the Senate Committee on Finance sent a letter to Equifax demanding information about the data breach. Jeb Hensarling, the top Republican on the House Finance Committee, has indicated that his committee might make a similar request.

Richard Smith

But the most strident denunciation from Washington has come from none other than North Dakota Senator Heidi Heitkamp, a Democrat who sits on the Senate Banking Committee, who demanded that prosecutors pursue a criminal investigation, and that "somebody needs to go to jail."

Smith said the company hesitated to disclose the breach because it had hired a cybersecurity firm to conduct an investigation, and was waiting on the results.

“Equifax Security first discovered the intrusion on July 29. Understandably, many people are questioning why it took six weeks to report the incident to the public. Shortly after discovering the intrusion, we engaged a leading cybersecurity firm to conduct an investigation.

 

At the time, we thought the intrusion was limited. The team, working with Equifax Security personnel, devoted thousands of hours during the following weeks to investigate."

Meanwhile, Smith says the company’s top priority is assisting affected consumers:

“Our top priority is doing everything we can to support affected consumers. Our team is focused on this effort, and we are engaged around the clock in responding to millions of inquiries from consumers. Importantly, outside investigators found no evidence of unauthorized activity on our core consumer or commercial credit reporting databases.”

Smith added that the company accepts responsibility for the breach, and that it was working to do whatever it can to assist customers who’s data have been compromised.

“Consumers and media have raised legitimate concerns about the services we offered and the operations of our call center and website. We accept the criticism and are working to address a range of issues.

 

We are devoting extraordinary resources to make sure this kind of incident doesn’t happen again. We will make changes and continue to strengthen our defenses against cyber crimes. We will make sure every consumer who wants protection has a full package of services. And we will continue to update everyone on our progress.”

Unfortunately for Equifax, its attempt to mitigate this ongoing public relations disaster was foiled by the USA Today editorial board, who positioned on the page opposite Smith’s missive an official editorial blasting the company’s handling of the breach, accusing it of “[bungling] just about every attempt to remedy the mess.”

In what’s perhaps the editorial’s most gratifying snippet, the editorial board argue that consumers can be excused for being hard on Equifax.

“It's hard to give Equifax the benefit of the doubt, considering that the credit reporting agencies don't give you the benefit of the doubt if you paid your mortgage late one month five years ago because your kid was in the hospital.

 

Nope, that's just a black mark on your credit scores, which affect your ability to secure a loan, get a job or rent an apartment.”

Like they say, what goes around, comes around.
 

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spastic_colon's picture

"blah blah blah My stock sale had not executed yet"

MillionDollarButter's picture

"I am so humbled by this, trust me.  No need to humble me any more."

Oh yeah?  How about CerseiWalkOfShame.jpg?

The Alarmist's picture

Uhhhhh ... we had to get past our lockup period first?

JSBach1's picture

Of course now those officers will be forced to buy back the stocks that they sold now as part of the "humbling" experience...

Shitonya Serfs's picture

If he retires soon, all his problems will magically disappear.

InjectTheVenom's picture

 

sir, that's a huge insult to the scumbag population, i demand a retraction .

JRobby's picture

Still trying to figure out how any of these "credit reporting" giants perform any service that is in the public's interest? They serve the banks and keep them out court on discrimination actions. When will the "proprietary" algorithms be made public? The ones that say if zip code = XXXXX deduct 50points from credit score.

jcaz's picture

"Humbled" enough to turn your officers over for securities violations?   Talk is cheap, dude.....

cheech_wizard's picture

From the article:

admin as login admin as password.

This is why those that can't make it as engineers go into IT. (downvote away, but you know it's true.)

 

 

NotApplicable's picture

I'm going to assume this is also their FIRST humbling moment.

Kobe Beef's picture

Check it... Equifax CISO is a woman with a Music degree.

Wanna make money?

Short Affirmative Action.

Ultimate Hedge, Bitchez

813kml's picture

Makes one wonder how they passed a security audit.

Yukon Cornholius's picture

Seriously, what's taking the Feds so long to arrest this punk? What are they so busy working on that they can't put his bald-headed faggot ass in cuffs and at least ask a few questions?

Just another (((link in the chain))).

glenlloyd's picture

118 years? Please, you were not keeping credit ratings on people the last 118 years. What a load of BS.

This douchebag needs to resign. If you don't need to borrow you don't need Equifax...plain and simple

Jugs Fan's picture

Equifax began in a Tennessee grocery store in 1898. The proprietor compiled a list of customers he considered to be creditworthy, and distributed that list to other business owners (for a fee). Demand was immediate. The business grew. New branches opened and the company incorporated in 1913. By 1920, the company had 37 branch offices throughout North America.

No Time for Fishing's picture

So you are ready to use your personal wealth to provide loans to individuals without checking their credit rating. If you were in the business of loaning YOUR money to strangers I think you would soon realize the service these a$$hole credit reporting companies provide. 

Xena fobe's picture

Credit references are manually checked all the time.  Credit reporting agencies are a convenience for maketing purposes.  And now for identity thieves.

waspwench's picture

There is no need to humble this guy anymore, there is, however, a great need to fine him very heavily and lock him up and throw away the key.

Which is worse - bankers or terrorists's picture

I am imagining a Braveheart drawn and quartering style death for this guy. And I would be happy to be the executioner.

JRobby's picture

Rip his guts out while still awake with rusty, unwashed implements then behead and saw off body parts to be displayed throughout the kingdom?

That's medieval!!!!

Which is worse - bankers or terrorists's picture

Medieval to one person, a dream maybe to come true to another

Bill of Rights's picture

Go fuck yourself sideways you criminal cunt.

Which is worse - bankers or terrorists's picture

When I think of Matt Tiabbi talking about corporate criminals going in a "pound in the ass" prison...we could basically put this guy's bunk in the showers.

Nobodys Home's picture

I wonder how many other secret "humbling moments" they've had for which they weren't caught.

TabakLover's picture

Shit-can this mofo and let him try THAT on for humbling.

Handful of Dust's picture

10 years in jail should give him enough time to learn humility, and honesty.

FoggyWorld's picture

Isn't going to happen - but it should.   We need to have congress look at these companies and rein them in.  Also need to look at who supplies them with data that really is none of their business.

BlindMonkey's picture

He can't take over Corzine's bunk in the jail cell.

 

Free Jon Corzine!

Cautiously Pessimistic's picture

Hopefully, your perp walk will be even more humbling.  Followed closely by losing your job and shaming your family.

aliens is here's picture

Scum bag and he has the nerver to judge people's credit history. F YOU!!!

buzzsaw99's picture

we have a pretty good idea already.  ;<)

aqualech's picture

So why is OK for them to keep my private information on their shitty server anyway?

BlindMonkey's picture

Blockchain can reclaim your private info.  Imagine being able to control who has access to your credit history via keys you control.

techpriest's picture

Whatever happened to 20% down and proof of a steady job? Oh right, if we did that the Ponzi would be exposed because no one would qualify for a loan anymore.

SweetDougisaTwat's picture

He needs to be offered up on the sacrificial alter of job termination.  In other words, the Board should fire his punk ass just because.  The pink shirt wearing pussy.

Salsa Verde's picture

Guy needs to fall down an open elevator shaft...on accident of course.

ali-ali-al-qomfri's picture

Mr. Trump I present to you a swamp critter, that is hurting Americans.

Before you go an pulll the plug to drain the swamp, you'll have to shoot a couple of the big gators that have nests.

JLee2027's picture

Equifax needs to be closed. Who gave them permission to hold all this personal data?

Which is worse - bankers or terrorists's picture

Anyone else want to meet the downvoter in a dark alley?

cryptoligarch's picture

Not me, but I've got a 9 inch blade that wants to meet the downvoter's kidneys.

prymythirdeye's picture

That's why you assholes sold your stock right?

Cardinal Fang's picture

It's all bullshit.

stant's picture

Was it a hack or the use of  a feature of the software?

techpriest's picture

Maybe someone in a 3-letter agency or a foreign-born Congressional staffer decided to make some extra millions on the side?

the cork's picture

.

Most humbling  Moment?

Not yet A hole.. Not by a long shot.

Wait until cellmate bubba bends you over, you fuckin' ripoff.

Then you'll know what "humbled" is all about.

 

RedBaron616's picture

White collar crooks, unfortunately, don't go to those kind of prisons. They go to the kind with tennis courts.