Robert McMillan and AnnaMaria Andriotis, Wall Street Journal:
Equifax has quadrupled spending on security, updated its security tools and changed its corporate structure since the breach, Paulino do Rego Barros Jr., the interim chief, said during a hearing by the Senate Commerce Committee.
But Mr. Barros stumbled when asked by Sen. Cory Gardner (R., Colo) whether Equifax was now encrypting the consumer data it stored on its computers — a basic step in hiding sensitive information from hackers, and one the company previously had admitted it didn’t take before the breach.
“I don’t know at this stage,” Mr. Barros said.
Before this catastrophic breach, your passcode-protected iPhone was more hardened against physical data access than every American’s credit information. Now, who knows? It may still be better-protected.
This is irresponsible to the point of negligence. I sincerely hope criminal charges are brought against Equifax for the results of their indifference towards basic security practices; if no criminal charges apply, it ought to trigger a process to ensure that new laws get written to hold companies accountable for inadequate protection of customer data.
In other news, Equifax reported their quarterly earnings today. Stephen Gandel of Bloomberg:
Equifax’s ability to increase its operating earnings during one of the most disastrous quarters, at least operationally and reputationally, in its history, or the history of most companies, really, attests to how entrenched the business is in the financial system. That will most likely add to the frustration of consumers and their advocates.
All that is probably why Equifax’s stock, which plunged initially after the hack, has rebounded some and been fairly steady. Shares closed at just less than $109 on Thursday before the company announced its results. That’s down from the $143 they were trading at before the hack, but up from the $94 they sank to two days after the hack was disclosed. The stock is amazingly down only 8 percent this year. What’s more, it has a price-to-earnings ratio of 18 times next year’s earnings. That’s not a P/E ratio of a company in jeopardy but one that investors think is highly valued and growing. By comparison, Apple Inc. has a similar P/E of 15.