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Equifax announced last week that the intensely private personal data it had in its possession for 143 million Americans had been hacked.
That's one in every two people.
People who...
...didn't ask to be "customers."
...now have a lifelong problem because of Equifax.
...may never recover financially.
I smell a rat.
Harsh?
Yes, and to my way of thinking, deservedly so.
Equifax maintained the financial equivalent of the "holy grail." Social Security numbers, driver license numbers, addresses, bank accounts, dates of birth, and more.
Everything needed to create a "new you."
I'm livid and not just because all this information has been stolen, either.
What really chaps my hide is that criminals can now use this information to file tax returns, claim refunds, access medical records, rent apartments, buy houses, take out loans, and more - all without you knowing for years to come.
This goes waaaaaaay beyond simple identity theft.
For instance, the IRS now has a massive problem on its hands because that agency will have to separate legitimate returns and refunds from false ones in a process that will stretch the already problem-plagued system to its very limits. At the same time, this potentially delays valuable refunds and e-filing.
Taxpayers Are on the Hook... Again
Once again, taxpayers - meaning you and me - are on the hook for corporate malfeasance that potentially is so bad that it makes big banks look like Boy Scouts for their role in the global financial crisis of 2008 that still roils markets today.
The government will likely have to increase the IRS budget using our tax dollars while average taxpayers will now have to spend more on accountants and lawyers both as part of the filing process thanks to Equifax's mess. Certainly, in the event that there's a problem.
Imagine what happens when a bad guy uses your Social Security number to create a "synthetic ID" - meaning real names and identities that are mixed with real Social Security numbers and addresses - and suddenly you have to prove that you never lived in Dallas and that you didn't buy that fancy $250,000 car and default on the financing related to the $2 million home it was garaged in.
Imagine needing a simple surgery after years of being healthy only to find your insurance deductible has been used up... by someone else.
Buying a car and being told your credit stinks... when you haven't used a credit card in years and pay for the little debt you have on time and in full.
No doubt you get the idea. You're going to be presumed guilty until proven innocent because Equifax has so much power over your life.
You know what really stinks, though?
Not a single American signed up for this and there is not a single regulatory body that is likely to put the company out of business. The Consumer Financial Protection Bureau and the Federal Trade Commission have both declined to comment on potential punishment as a result of what's happened.
Worse, there's not a damn thing you can do.
As of press time, there are 23 class-action lawsuits filed since Equifax disclosed the breach, according to USA Today.
So what.
You cannot, for example, ask Equifax to stop tracking your information because you never had any say in them accumulating it in the first place.
Nor is there apparently any recourse against the three senior executives who sold nearly $2 million worth of company stock prior to announcing the breach.
One company spokeswoman, Ines Gutzmer, claims that Chief Financial Officer John. W. Gamble, U.S. Information Solutions President Joseph M. Loughran III, and Rodolfo O. Ploder, president of Workforce Solutions, knew nothing.
Puuuuullllleeeeeaaase... I was born in the middle of the night, but it was not last night.
According to the SEC, none of the sales were pre-scheduled. Every single one of these executives is a sophisticated insider with access to material non-public information.
Then there's the company's response to the data theft itself.
CEO Rick Smith issued a video in a white shirt sans tie that is about as calculated a media clip as I've ever seen. No doubt his publicist and crisis management team carefully dressed him to appear more like a man in the street than the high-powered C-level exec he is.
I'll give him this, though - Smith's taken corporate groveling to a new level even though it strikes me as wholly transparent and craven.
The Company's Solution: Just Another Marketing Ploy
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.
Thank you VERY much Keith!! I am scared stiff about our credit being effected. You mentioned that you knew yours was, so how does a person check to see if their credit info is compromised through Equifax?
Go to http://www.equifaxsecurity2017.com
Hello Joseph and thank you for jumping in Rick!
The really sad thing in all this is that the cat is out of the bag. I think there needs to be a total re-examination of how credit ratings agencies work and liability assigned for situations like this one.
Best regards and thanks for being part of the Money Morning Family, Keith :-)
How do I sign up for the free one year monitoring? I put a feeze on my account .
Go to http://www.Equifaxsecurity2017.com
That stinks; how could Equifax screw up so badly and avoid any consequences. Kind of reminds me about the time I lost my SIN card. I got a notice from Revenue Canada that I owed them taxes. I was fortunate that I had proof of working elsewhere from where the data came from so I managed to avoid paying taxey but I lost my old card which had four sevens in it.
Good morning Laszlo.
This is a very serious and surreal situation. Sadly, I believe it's a long way from over. There will be breaking news for weeks about which executives knew what and when, how data is used, and how it's protected…or not.
Best regards and thanks for being part of the Money Map Family, Keith :-)