Equifax data breach recovery costs pass $1 billion

In Equifax’s latest Security and Exchange Commission filing the company is estimating it has spent about $1.4 billion recovering from its 2017 data breach that exposed the PII of 148 million customers, according to a published report.

This includes a $690 million charge made during the first quarter of 2019 related to outstanding litigation and potential fines related to its 2017 cybersecurity incident. The funds will be dedicated to covering legal action brought by federal and state regulators and federal class action cases, said Mark W. Begor, Equifax’s CEO, during an earnings call made last week. Berger also told investors the company reached confidential settlement covering the consumer federal class action cases that if approved by the court will resolve and dismiss the claims asserted in the consumer cases.

“The proposed global settlement provides for the
establishment of a single consumer redress fund, which was our goal and certain
other non-monetary terms. As we’ve discussed previously, we believe the
consumers are better served through a single consumer fund and a global
settlement of the federal and state government investigations, together with
the consumer class action litigation. We expect to complete definitive
settlement agreements with the parties in the coming weeks,” he said.

There were also several one-time costs incurred during the
first quarter related to the breach, $83 million for technology and security
spending, $12 million for legal fees and $2 million for consumer support,
Berger reported.

However, the incident will continue to impact the company’s
balance sheet for the foreseeable future.

“While this charge represents our current estimate to
resolve many of the significant issues facing the Company, we expect to incur
additional losses associated with the other claims and litigation related to
the 2017 incident. We will continue to work with all parties to bring these
matters to closure as soon as possible, while balancing the needs of our
Company, employees, customers and shareholders,” Berger said.