Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Attacks/Breaches

1/15/2020
06:00 PM
Connect Directly
Twitter
LinkedIn
RSS
E-Mail
100%
0%

2017 Data Breach Will Cost Equifax at Least $1.38 Billion

Company agrees to set aside a minimum of $380.5 million as breach compensation and spend another $1 billion on transforming its information security over the next five years. The 147 million US consumers affected by the breach have one week from today to file a claim.

The final minimum tab for Equifax's failure to patch a known web application security flaw—that later proved to be the root cause of the company's disastrous data breach in 2017—is over $1.38 billion.

The US District Court for the Northern District of Georgia Monday granted final approval of a settlement arrived at last July between the Federal Trade Commission and Equifax. Under the settlement, Equifax has agreed to set aside at least $380.5 million to settle claims related to its 2017 breach. The company has also agreed to spend at least $1 billion on information security and related technologies over a period of five years.

Personal data, including Social Security Numbers belonging to some 147 million US consumers was compromised in the breach. Equifax has blamed the incident on a buggy component in the open-source Apache Struts framework for which a patch was available at the time of the breach.

Money from the $380.5 million fund will be used to pay for credit monitoring services and compensation of up to $20,000 to individuals who can show documented out-of-pocket expenses directly related to the breach. The court-approved settlement allows individuals to claim up to 20 hours—at $25 per hour—for any time they might have had to spend taking preventative measures to protect their data against fraud and misuse following the breach. Up to 10 of those hours can be self-certified and requires no documentation.

Equifax will also provide up to four years of free three-bureau credit monitoring and identify protection services to victims of the data breach. In addition, the company will provide another six years of its own credit monitoring and identity protection service for free. Victims who were legal minors at the time of the breach are eligible for a total of 18 years of free credit monitoring.

Substantial as the costs are for Equifax, they could go even higher. The settlement for instance requires Equifax to set aside an additional $125 million in the event the $380.5 million fund proves insufficient to pay all claims. On top of that, the costs for the six years of additional credit monitoring that Equifax is required to provide under the settlement are not part of the $380.2 million fund. In approving the settlement, the court estimated that the market value of the free credit monitoring service—if all 147 million victims sign up for it—at an additional $2 billion for Equifax.

"This settlement is the largest and most comprehensive recovery in a data breach case in U.S. history by several orders of magnitude," District Judge Thomas Thrash, Jr. wrote. "The minimum cost to Equifax of the settlement is $1.38 billion and could be more, depending on the cost of complying with the injunctive relief," and other measures, he wrote.

Rui Lopes, sales engineering and technical support director at Panda Security says the security breach suffered by Equifax in 2017 was one of the biggest data in history. The big question is whether it could have been prevented. "And the answer is simply 'yes,'" Lopes says. "Equifax left the door open to cybercriminals by not updating an open-source web application development framework."

However, Jack Mannino, CEO at nVisium says what the incident really highlights, is the difficulty involved in running a security program at scale, especially for those under constant attack.

Though there were demonstrated gaps in security monitoring and secure development that contributed to the breach, the security issues at Equifax were not unique to them he says.  "Most organizations commonly struggle with keeping software libraries and dependencies up to date," Mannino says. "However, given the value of the data they protect, it demonstrates that there are real consequences to these events.”  

Equifax's Data Breach Settlement Website and settlement notice contains all details about the final settlement and the reliefs and benefits available under it. Consumers have until Jan. 22, 2020 to file a claim.

Related Content:

Check out The Edge, Dark Reading's new section for features, threat data, and in-depth perspectives. Today's top story: "How to Keep Security on Life Support After Software End-of-Life."

Jai Vijayan is a seasoned technology reporter with over 20 years of experience in IT trade journalism. He was most recently a Senior Editor at Computerworld, where he covered information security and data privacy issues for the publication. Over the course of his 20-year ... View Full Bio
 

Recommended Reading:

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
COVID-19: Latest Security News & Commentary
Dark Reading Staff 6/4/2020
Abandoned Apps May Pose Security Risk to Mobile Devices
Robert Lemos, Contributing Writer,  5/29/2020
How AI and Automation Can Help Bridge the Cybersecurity Talent Gap
Peter Barker, Chief Product Officer at ForgeRock,  6/1/2020
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Write a Caption, Win a Starbucks Card! Click Here
Latest Comment: What? IT said I needed virus protection!
Current Issue
How Cybersecurity Incident Response Programs Work (and Why Some Don't)
This Tech Digest takes a look at the vital role cybersecurity incident response (IR) plays in managing cyber-risk within organizations. Download the Tech Digest today to find out how well-planned IR programs can detect intrusions, contain breaches, and help an organization restore normal operations.
Flash Poll
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2020-13842
PUBLISHED: 2020-06-05
An issue was discovered on LG mobile devices with Android OS 7.2, 8.0, 8.1, 9, and 10 (MTK chipsets). A dangerous AT command was made available even though it is unused. The LG ID is LVE-SMP-200010 (June 2020).
CVE-2020-13843
PUBLISHED: 2020-06-05
An issue was discovered on LG mobile devices with Android OS software before 2020-06-01. Local users can cause a denial of service because checking of the userdata partition is mishandled. The LG ID is LVE-SMP-200014 (June 2020).
CVE-2020-13839
PUBLISHED: 2020-06-05
An issue was discovered on LG mobile devices with Android OS 7.2, 8.0, 8.1, 9, and 10 (MTK chipsets). Code execution can occur via a custom AT command handler buffer overflow. The LG ID is LVE-SMP-200007 (June 2020).
CVE-2020-13840
PUBLISHED: 2020-06-05
An issue was discovered on LG mobile devices with Android OS 7.2, 8.0, 8.1, 9, and 10 (MTK chipsets). Code execution can occur via an MTK AT command handler buffer overflow. The LG ID is LVE-SMP-200008 (June 2020).
CVE-2020-13841
PUBLISHED: 2020-06-05
An issue was discovered on LG mobile devices with Android OS 9 and 10 (MTK chipsets). An AT command handler allows attackers to bypass intended access restrictions. The LG ID is LVE-SMP-200009 (June 2020).