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. In an investor call, interim CEO Paulino do Rego Barros outlined steps he said the company was taking to improve security practices and compensate members of the public whose information was stolen.
The company sparked a public outcry and congressional inquiries in September after revealing that hackers had stolen the personal details, including names, dates of birth and social security numbers, of nearly 146 million people. The company gathers data on consumers to help lenders determine borrowers' creditworthiness. "I and the entire Equifax organization apologize to the individuals whose personal information was stolen, as well as to our customers, partners, investors, managers and other constituents," Barros said.
The company on Thursday reported $96.3 million in net quarterly income, a year-on-year drop of 27 percent. Revenues, however, were up four percent at $834.9 million. 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 US citizens.
Equifax also said it believed lender clients had put off some business with Equifax until the company can assure it has stepped up security to protect consumer data. Chief Financial Officer John Gamble said Friday the company's executives would forgo incentive pay this year as a result of the breach. 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.
The company is now facing state and federal investigations as well as class-action lawsuits over the breach and has offered free credit monitoring to members of the general public, regardless of whether their information was stolen. Equifax said this month that executives who sold nearly $2 million in stock just prior to the disclosure of the hack were unaware of the breach at the time.
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