Published: Sat, November 11, 2017
Markets | By Rosalie Gross

Equifax calculates massive data breach will cost company at least $140 million

Equifax calculates massive data breach will cost company at least $140 million

"As we report our third-quarter results, we recognize that we have an important journey in front of us to regain the trust and confidence of consumers and our business customers", said Paulino Barros, Equifax's interim chief executive in the release.

Scandal-hit credit bureau Equifax on Friday apologized to consumers and investors for its massive security breach, a day after reporting a sharp drop in quarterly earnings.

The hack resulted in a one-time charge of $87.5 million for investigation and legal costs as well as offers of free credit monitoring to all United States citizens.

The company said it has insurance coverage for cybersecurity, crime, general liability and other areas, but it is unclear how much of the hack-related costs will be covered. The global consumer business, which sells credit-monitoring and identity-protection tools, posted little change in revenue. The Atlanta-based company said it recorded $87.5 million in expenses related to the hack during the quarter, including legal fees, investigation of the breach, and free credit monitoring for US consumers whose data was exposed in the breach. Equifax has agreed to provide the TrustedID Premier credit monitor to all USA consumers free for one year. Any negative audit results could result in a loss of customers, Equifax warned in the filing. "And to date, we do not have any evidence that we can probably add problem activity to data stolen from Equifax".

More news: GOP Tax Bill Could Pass The House By Next Week

Since the disclosure, the share of Equifax credit files locked or frozen by consumers has gone from 0.5 percent to between 1.5 percent and two percent, according to Gamble. It has slumped 24 percent since the hack was disclosed. The incident prompted three top officials to leave the company, including former chief executive Richard Smith.

Net income for the period slid to $96.3 million, or 79 cents per diluted share, compared to the $132.8 million, or $1.09 per diluted share from a year ago. The average estimate of 14 analysts surveyed by Bloomberg was for adjusted profit of $1.49 a share.

Equifax needs to do a better job of communicating whether it believes the hackers are still inside its network, said Mark Rasch, a former USA federal cyber-crimes prosecutor who advises businesses on responding to breaches. "Even if that number fails to capture those Equifax has directly notified because state law mandated it, or because their credit card information was part of the information compromised by the breach, it remains quite possible that millions of individuals do not know for certain if their information was exposed".

Like this: