EFX Equifax Inc

Item 1.01. Entry into a Material Definitive Agreement.

As previously disclosed, Equifax Inc. (the “Company”) has been a party to a significant number of legal proceedings and investigations in connection with a cybersecurity incident in 2017 following a criminal attack on the Company’s systems that involved the theft of certain personally identifiable information of consumers.

On July 19, 2019 and July 22, 2019, the Company entered into multiple agreements that resolve a class action lawsuit filed on behalf of U.S. consumers captioned In re: Equifax, Inc. Customer Data Security Breach Litigation, MDL No.  2800 (Consumer Cases) (the “U.S. Consumer Litigation”) and the investigations of the Federal Trade Commission (“FTC”), the Consumer Financial Protection Bureau (“CFPB”), the Attorneys General of 48 states, the District of Columbia and Puerto Rico (the “MSAG Group”) and the New York Department of Financial Services (“NYDFS”) (collectively, the “Consumer Settlement”).

Under the terms of the Consumer Settlement, the Company will contribute $380.5 million to a non-reversionary settlement fund (the “Consumer Restitution Fund”) to provide restitution for U.S. consumers identified by the Company whose personal information was compromised as a result of the 2017 cybersecurity incident (the “affected consumers”).

The Consumer Restitution Fund will be used to (1) compensate affected consumers for certain unreimbursed costs or expenditures incurred by affected consumers that are fairly traceable to the 2017 cybersecurity incident, (2) provide affected consumers with an opportunity to enroll in at least four years of credit monitoring services provided by a third party unaffiliated with the Company or alternative compensation for affected consumers who already have other credit monitoring services, (3) provide affected consumers with additional benefits such as identity restoration services and (4) pay reasonable attorneys’ fees and reasonable costs and expenses for the plaintiffs’ counsel in the U.S. Consumer Litigation (not to exceed $80.5 million) and administrative and notice costs.

The Company has agreed to contribute up to an additional $125 million to the Consumer Restitution Fund to cover unreimbursed costs and expenditures described in (1) above in the event the $380.5 million in the Consumer Restitution Fund is exhausted. In addition, if the number of affected consumers who enroll in the third party credit monitoring services described above in (2) exceeds seven million, the Company may be required, under certain circumstances, to contribute additional money into the Consumer Restitution Fund to cover the incremental cost of providing credit monitoring services to the additional affected consumers.

The Company also agreed to pay an additional $180.5 million to the MSAG Group and the following monetary penalties: (1) $100 million to the CFPB and (2) $10 million to the NYDFS.

The Company also agreed to implement certain business practice commitments related to information security to safeguard the personal information of consumers, including conducting third party assessments of its information security program.

The Consumer Settlement, other than the agreement with the NYDFS, is subject to court approval. The agreements regarding the U.S. Consumer Litigation and the FTC and CFPB investigations are subject to approval by the U.S. District Court for the Northern District of Georgia (the “Court”). The settlement with the MSAG Group consists of substantially similar agreements with each of the participating jurisdictions, and each agreement is subject to court approval in the relevant jurisdiction. There can be no assurance that the courts in each relevant jurisdiction will approve the agreements which make up the Consumer Settlement.

The Company expects to pay the MSAG Group, the CFPB and the NYDFS in the third quarter of 2019. The Company will establish and contribute approximately $25 million to the Consumer Restitution Fund promptly after the Court approves the issuance of notice of class action settlement. That preliminary Court approval is expected in the third quarter of 2019. The contribution of the remainder of the $380.5 million to the Consumer Restitution Fund will be made after final Court approval of the Consumer Settlement, which could occur as early as the fourth quarter of 2019. The timing of the final Court approval of the settlement agreement for the U.S. Consumer Litigation cannot be predicted with certainty as it will depend on a number of factors outside of our control, including the number of objections, if any, to the settlement agreement, the Court’s schedule and discretion, and any appeals, among other factors. Our current plans are to finance the payments with existing borrowing capacity, including under our $1.1 billion five-year unsecured revolving credit facility and our $225 million receivables funding facility.

The Company’s participation in the Consumer Settlement does not constitute an admission by the Company of any fault or liability, and the Company does not admit fault or liability.

If approved by an applicable court, the Consumer Settlement will only resolve the U.S. Consumer Litigation and the investigations of the FTC, CFPB, MSAG Group and NYDFS. All other legal proceedings and investigations found under the caption “Legal Proceedings” in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 as filed with the Securities and Exchange Commission on May 10, 2019, other than as specifically stated therein, remain ongoing.