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November 10, 2017

Equifax profits plummet in wake of mega data breach

Equifax ceases to come back from the data breach, as profits dramatically fall in latest quarter.

By April Slattery

Equifax is still picking up the pieces following the disastrous data breach which hit the firm this summer, with quarterly profits revealing a loss for the credit-monitoring giant.

Following the data breach, which leaked the personal details of 143 million customers worldwide, the company saw profits plummet by 27% to $96.3m. Revenue did, however, rise by 4% to $834m, although this fell short of the 6% to 7% Equifax forecast for the quarter.

The data breach was first reported in early September, caused by the company failing to fix a software flaw. Passwords, email addresses, card details and even driving license numbers were leaked for customers in the UK and USA.

Profits were not the only thing Equifax lost as a result of the data breach, with the CIO and CSO both resigning after the data breach was disclosed. It did not stop there, however, with the CEO Richard Smith also leaving the company following a myriad of complaints and lawsuits regarding the handling of the data breach.

Equifax profits plummet in wake of mega data breach

Profits plummet, adding to Equifax’s problems.

Filling in after Smith’s departure, Interim CEO Paulino Barros said: “As we report our third quarter results, we recognize that we have an important journey in front of us to regain the trust and confidence of consumers and our business customers.”

Many would argue the loss in profit perfectly correlates with the data breach, especially as Equifax’s Q3 results dedicated a separate section to their costs regarding the attack.

The company recorded a huge $87.5 million  for expenses related to the cybersecurity incident, with support for consumers following the breach topping $14.9m. Still dealing with the fallout, Equifax expects additional costs of  between $56 million and $110 million.

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Things went from bad to worse following the firm’s Q3 results, with shares also plummeting. On Thursday Equifax’s shares closed at $108.95, down by 24% from what they were prior to the breach.

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It is difficult to look positively to the future as things are seemingly going from bad to worse, but the companies Interim CEO remains sure that the future is bright for the company by setting out new objectives in light of the poor quarterly results.

Barros said: “As we look to the future, I have committed Equifax to four things: protecting consumers, enhancing our security, empowering consumers to control access to personal credit data and leading our industry to confront the massive economic and national security threats represented by cyber criminals.”

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