Hack Puts Equifax at Risk of Pullback by Lenders
September 12 2017 - 6:41PM
Dow Jones News
By AnnaMaria Andriotis and Emily Glazer
Banks and other financial companies are mulling the possibility
of shifting some business away from Equifax Inc. in the wake of its
data breach and to some of the firm's credit-reporting rivals,
according to people familiar with the firms.
Lenders are unlikely to take any immediate action and are
seeking more information from Equifax about the hack attack that
exposed sensitive personal financial information about potentially
143 million Americans. Still, large banks, in particular, have
expressed dismay privately that their customers' information was
compromised, that they received no advance warning of the breach
announcement and that they still have little insight into what went
wrong, these people said.
Equifax didn't immediately respond to requests for comment.
Equifax has already faced widespread criticism from consumers.
In the aftermath of the breach disclosure many consumers said they
struggled with the firm's website and policies.
Equifax is also facing political ire: Two congressional
committees are planning hearings into the hack, and the Senate
Finance Committee on Monday sent the company a list of requests for
information about the attack, the company's response to it and who
knew what when about the problem.
Executives at financial firms in recent days have publicly
expressed concern about the breach. James Dimon, chief executive of
J.P. Morgan Chase & Co., the biggest U.S. bank by assets, spoke
about Equifax twice at conferences on Tuesday.
Mr. Dimon said he is interested in understanding more about
whether the hack is the sort of attack that could have happened to
any company or if there was something specific that Equifax didn't
do correctly. "All that will matter, it's obviously important," he
said.
He also said, "It depends what happened and how it happened,
whether they could've or should've." Mr. Dimon said that the bank
was in contact with Equifax.
Speaking at a conference the day before, Capital One Financial
Corp. chief Richard Fairbank said the cost of the attack would be
borne by both consumers and financial companies. "A bunch of our
customers are affected," he said. "It's going to be costly to them
and to us."
It is unlikely that financial firms would cease doing business
with Equifax altogether. But, as contracts with the company come up
for renewal, they may look to shift some of their business to
rivals such as TransUnion or Experian PLC, the people familiar with
the matter said.
For most loans, excluding mortgages, lenders often don't check
credit reports from all three big credit-reporting firms. Moving
away from Equifax would likely result in more market share to
TransUnion and Experian.
The possibility of losing market share could add to the pressure
on Equifax, which is already facing lawsuits and investigations
related to the breach. The company's stock has fallen nearly 20%
since just before the hack was announced last week.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and
Emily Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
September 12, 2017 18:26 ET (22:26 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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