by Jeff Sovern
Remember all the posturing in the congressional hearings and elsewhere after the Equifax breach that affected more than 140 million consumers? But a year later, little has changed, at least in Washington (litigation is still pending). Wouldn't it be nice if the members of Congress who expressed outrage actually did something to protect their constituents? Congress did pass a bill making credit freezes free, but as consumers still have to communicate to credit bureaus that they want to freeze their credit reports, and consumers usually stay with the default, I bet the vast majority of consumers still have not frozen their credit reports. Bills to do something more significant about data breaches are still pending in Congress, and you never know what will happen there, but I wouldn't hold my breath. The American Banker has an article summarizing where things stand. Here's my favorite excerpt:
[Consumer Data Industry Association president Francis] Creighton said there is already enough pressure on the credit bureaus to avoid data breaches.
"Credit bureaus are already heavily incentivized to not have breaches," Creighton said. "The market consequence is the most important discipline on them."
Before the data breach was disclosed, Equifax's stock traded above $140 a share. Shares dropped below $100 in the days following the announcement of the breach, though they have recovered since. Equifax shares are currently trading above $130.
I'm sorry [actually, I'm not], but I don't think that kind of stock price fall is a sufficient deterrent. Especially as we know it wasn't enough to cause Equifax to take adequate precautions before the breach. And obviously a stock market response would have no relevance whatsoever for a company that is privately held.
For more, take a look at this report by USPIRG.