Former Equifax CEO Richard Smith testified before the Senate Banking Committee Wednesday morning about this summer’s hack of the credit reporting agency he ran until his resignation last week. The hack, which exposed the private information—including Social Security and credit card numbers—of more than 145 million Americans, was announced last month, and has since come under scrutiny by Sen. Elizabeth Warren (D-Mass.), a staunch critic of Wall Street.
Given the opportunity to question the company’s CEO, Warren did not disappoint. She highlighted the many ways that Equifax will profit from the hack, and called for a major overhaul of the entire credit reporting industry, whose incentives she called “out of whack.”
“The breach of your system has actually created more opportunities for you,” Warren said to Smith, noting that, for instance, Equifax is offering one year of free credit monitoring to consumers, but after that, people will have to pay to keep the service. “If just one million of them buy just one more year of monitoring through Equifax, at the standard rate of $17 per month, that’s more than $200 million in revenue for Equifax because of this breach,” she noted.
Warren continued by outlining other ways that Equifax has profited and will continue to from the breach. She noted that since 2013, Equifax has disclosed four different hacks, yet the company’s profits have grown, in that same time frame, by more than 80 percent—a point that Smith confirmed.
Equifax, Warren concluded “did a terrible job of protecting our data because they didn’t have a reason to care to protect our data. The incentives in this industry are completely out of whack. Because of this breach, consumers will spend the rest of their lives worrying about identity theft,” she said. “But Equifax will be just fine. Heck, it could actually come out ahead.”