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Equifax Tells Investors They Could Be Breached Again - And That They're Still Profitable (nypost.com)
"Equifax executives will forgo their 2017 bonuses," reports CNBC. But according to the New York Post, the company "hasn't lost any significant business customers... Equifax largely does business with banks and other financial institutions -- not with the people they collect information on."
Even though it's facing more than 240 class-action lawsuits, Equifax's revenue actually increased 3.8% from July to September, to a whopping $834.8 million, while their net income for that period was $96.3 million -- which is still more than the $87.5 million that the breach cost them, according to a new article shared by chicksdaddy: The disclosure, made as part of the company's quarterly filing with the US Securities and Exchange Commission, is the first public disclosure of the direct costs of the incident, which saw the company's stock price plunge by more than 30% and wiped out billions of dollars in value to shareholders. Around $55.5m of the $87.5m in breach-related costs stems from product costs â" mostly credit monitoring services that it is offering to affected individuals. Professional fees added up to another $17.1m for Equifax and consumer support costs totaled $14.9m, the company said. Equifax also said it has spent $27.3 million of pretax expenses stemming from the cost of investigating and remediating the hack to Equifax's internal network as well as legal and other professional expenses.
But the costs are likely to continue. Equifax is estimating costs of $56 million to $110 million in "contingent liability" in the form of free credit monitoring and identity theft protection to all U.S. consumers as a good will gesture. The costs provided by Equifax are an estimate of the expenses necessary to provide this service to those who have signed up or will sign up by the January 31, 2018 deadline. So far, however, the company has only incurred $4.7 million through the end of September. So, while the upper bound of those contingent liability costs is high, there's good reason to believe that they will never be reached.
The Post reports that some business customers "have delayed new contracts until Equifax proves that they've done enough to shore up their cybersecurity."
But in their regulatory filing Thursday, Equifax admitted that "We cannot assure that all potential causes of the incident have been identified and remediated and will not occur again."
Even though it's facing more than 240 class-action lawsuits, Equifax's revenue actually increased 3.8% from July to September, to a whopping $834.8 million, while their net income for that period was $96.3 million -- which is still more than the $87.5 million that the breach cost them, according to a new article shared by chicksdaddy: The disclosure, made as part of the company's quarterly filing with the US Securities and Exchange Commission, is the first public disclosure of the direct costs of the incident, which saw the company's stock price plunge by more than 30% and wiped out billions of dollars in value to shareholders. Around $55.5m of the $87.5m in breach-related costs stems from product costs â" mostly credit monitoring services that it is offering to affected individuals. Professional fees added up to another $17.1m for Equifax and consumer support costs totaled $14.9m, the company said. Equifax also said it has spent $27.3 million of pretax expenses stemming from the cost of investigating and remediating the hack to Equifax's internal network as well as legal and other professional expenses.
But the costs are likely to continue. Equifax is estimating costs of $56 million to $110 million in "contingent liability" in the form of free credit monitoring and identity theft protection to all U.S. consumers as a good will gesture. The costs provided by Equifax are an estimate of the expenses necessary to provide this service to those who have signed up or will sign up by the January 31, 2018 deadline. So far, however, the company has only incurred $4.7 million through the end of September. So, while the upper bound of those contingent liability costs is high, there's good reason to believe that they will never be reached.
The Post reports that some business customers "have delayed new contracts until Equifax proves that they've done enough to shore up their cybersecurity."
But in their regulatory filing Thursday, Equifax admitted that "We cannot assure that all potential causes of the incident have been identified and remediated and will not occur again."
If these corporations were actually people, they would be feed to the dogs.
If they do have another event on a similar scale once the GDPR has come into effect in Europe next year, being fed to the dogs might be the least of their problems. The penalties for a major compliance failure can be up to 4% of annual global turnover. Going by the figures mentioned in TFS, it looks like that would wipe out Equifax's entire net income for between one and two quarters. That's just the financial penalty from the regulators in the EU, and doesn't take into account any additional criminal sanctions that member states might choose to impose.
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