Sen. War­ren says Equifax could ben­e­fit from data hack

New Haven Register (New Haven, CT) - - FRONT PAGE -

U.S. Sen. El­iz­a­beth War­ren said one of the big­gest in­jus­tices of the Equifax Inc. hack is that the com­pany might ac­tu­ally ben­e­fit from the fact that a ma­jor­ity of Amer­i­cans’ per­sonal data is now in the hands of crim­i­nals.

“Equifax will be just fine,” War­ren told former Equifax Chief Ex­ec­u­tive Of­fi­cer Richard Smith at a Se­nate Bank­ing Com­mit­tee hear­ing Wed­nes­day. “Heck, it could ac­tu­ally come out ahead.”

War­ren, one of the fi­nance in­dus­try’s most re­lent­less crit­ics, noted that the com­pany ad­ver­tises fraud-pro­tec­tion ser­vices and prof­its from sell­ing con­sumer-data that it prom­ises to keep safe. On Equifax and its com­peti­tors, the Mas­sachusetts Demo­crat said she wants the “en­tire in­dus­try to be trans­formed.”

Smith re­sponded that after the breach, Equifax is of­fer­ing vic­tims free fraud pro­tec­tion tools and other ser­vices.

War­ren said that may be true, but once the free pe­ri­ods ex­pire, many con­sumers will prob­a­bly choose to start pay­ing for the ser­vices. She said there are sev­eral ways Equifax is poised to make “mil­lions of dol­lars off its own screwup.”

Smith was fac­ing his sec­ond of four con­gres­sional hear­ings this week on a breach that led to the theft of 145.5 mil­lion Amer­i­cans per­sonal data, in­clud­ing So­cial Se­cu­rity num­bers and driv­ers’ li­cense in­for­ma­tion.

After such a stag­ger­ing in­tru­sion, Sen. John Kennedy ex­pressed sur­prise that Equifax is get­ting new busi­ness, in­clud­ing from the fed­eral gov­ern­ment. The Louisiana Repub­li­can noted that Equifax had just re­ceived an In­ter­nal Rev­enue Ser­vice con­tract that’s es­ti­mated to cost more than $7.2 mil­lion to ver­ify tax­payer iden­ti­ties and help with fraud pre­ven­tion.

That’s like giv­ing “Lind­say Lo­han the keys to the mini­bar,” Kennedy quipped.

Smith said that to his knowl­edge the IRS deal was a re­newal of ex­ist­ing work Equifax does for the agency, and not a no-bid con­tract.

The con­tract also drew crit­i­cism Wed­nes­day on the other side of Capi­tol Hill dur­ing a hear­ing held by the House Ways and Means Over­sight Sub­com­mit­tee. Rep. Jackie Walorski, an In­di­ana Repub­li­can, called the IRS’ de­ci­sion to award busi­ness to Equifax “an ab­ject fail­ure.”

The IRS de­fended the move.

“Fol­low­ing an in­ter­nal re­view and an on-site visit with Equifax, the IRS be­lieves the ser­vice Equifax pro­vided does not pose a risk to IRS data or sys­tems,” the agency said in a state­ment.

Mark Wil­son / Getty Images

Former Equifax CEO Richard Smith pre­pares to tes­tify be­fore the Se­nate Bank­ing, Hous­ing and Ur­ban Af­fairs Com­mit­tee in the Hart Se­nate Of­fice Build­ing on Capi­tol Hill this week.

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