Equifax Breach: Status Quo Failing to Protect Consumers, U.S. House Panel Says

By Awakening Staff
Editorial/News Analysis

Having a virtually all-borrowed money supply, marinated in interest charges, presents a host of “headaches”—including depleted purchasing power and the constant need for new loans to retire old loans. In this never-ending cycle, the future is mortgaged to buy things in the present and the risk of personal data exposure is profoundly amplified.

In the United States, one major way this exposure is enabled is by assigning the Social Security number  to each citizen when they’re young so that, throughout their lifetime, this number shows up in countless applications and transactions.

Simply put, the nine-digit Social Security number long ago morphed into a virtual national ID–constituting an essential identifier which, when hacked, gives hackers a major inroad into the lives of other people.

So, that vital number gets scattered all over the “cyber” environment because the disclosure of one’s personal Social Security number is required whenever applying for bank loans, credit cards, making certain purchases. Yet, society and its leaders act surprised when those numbers, floating from data base to data base, get hacked.

Indeed, Canadian authorities act surprised when places like Casino Rama in Ontario get hacked. But guess who was called to help out when Casino Rama was hacked? Equifax.

But Equifax itself has become the target of a reported data-breach.

This exposes the fact that even this company—entrusted with monitoring credit scores and reporting security breaches—was breached. This irony raises scores of questions that need to be asked of banks, of regulators and of credit-monitoring companies, including Standard and Poor, Moody’s, Experian and others—including Equifax.

UNITED STATES CONGRESS TAKES NOTICE

In the U.S. House of Representatives, the chairman of the Financial Services Committee, Mr. Jeb Hensarling, held a four-hour committee hearing on Oct. 5 about Equifax. However, you likely haven’t heard about it due to most American media and Canadian media obsessing over scandals between the Trump White House and congressional leaders, along with constant claims of Russia-White House “collusion” and scary but sketchy scenarios about North Korean missile tests.

Focusing on bedrock financial issues that may be more vital and pressing, Congressman Hensarling is reviewing existing laws and the duties of U.S. federal regulators, among other things, to see what happened and what can be done in the wake of Equifax being breached.

“On September 7, Equifax announced what it called a ‘cybersecurity incident’ at its business that potentially affects 145 million U.S. consumers, nearly half of all Americans,” Hensarling noted in a news release and repeated at the hearing. Hensarling also added, “This may be the most harmful failure to protect private consumer information the world has ever seen.”

He continued, “In other words, if you are hearing my voice, you are either the victim of the breach or you know someone who is.  That’s how massive this breach was.  The criminals got basically everything they need to steal your identity, open credit-card accounts in your name and cause you untold frustration and financial calamity.”

According to this House panel, Equifax “failed to disclose the breach to consumers and its shareholders.  It provided confusing information about whether people were victims of the breach or not.  And beyond belief, senior executives sold their Equifax shares after the company knew of the breach and before the company disclosed the breach.”

Hensarling went on to say: “I trust the Justice Department and the Securities and Exchange Commission will get to the bottom of this. Clearly, action by the Federal Trade Commission, the Consumer Financial Protection Bureau and potentially other regulators is required.  Congress must ensure that federal law enforcement and federal regulators do their jobs so justice can be served and victims are made whole.”

So, at this juncture, this committee, according to its public statements, seems serious about preventing further data breaches.

However, Hensarling admits that the federal government of the United States has a poor batting average in terms of protecting personal information. Thus, he says Americans should be skeptical of exploitative attempts to “never let a good crisis go to waste” and “impose a Washington-forced technology solution,” although he’s still calling for a  “consistent national standard for both data security and breach notification in order to better protect our consumers, hold companies accountable and assure that this affair does not repeat itself.”

Ironically, the Financial Services Committee passed pertinent legislation about two years ago—called the bipartisan Data Security Act.  In light of that, Hensarling is calling on Congress to revisit this and any other relevant legislation and make necessary improvements.

Meanwhile, it remains to be seen whether U.S. lawmakers will take the extra step and probe deeper into their private central bank (The Federal Reserve) and into the commercial banking system—in order to examine the manner, and the degree, in which banks collect and store vast amounts of personal data on citizens.