Equifax will pay up to $700 million in fines and monetary relief to consumers over a massive 2017 data breach at the credit reporting bureau that affected more than 148 million people.
The proposed settlement, which is subject to approval by a federal court, was announced Monday by the company, the Federal Trade Commission, the Consumer Financial Protection Bureau and 50 states and territories.
The consumer data exposed in the breach included Social Security numbers, birthdates and addresses and, in some cases, driver’s license numbers.
CFPB Director Kathleen Kraninger said the settlement includes $425 million to cover the “time and money [people affected by the breach] spent to protect themselves from potential threats of identity theft or addressing incidents of identity theft as a result of the breach.”
Equifax also agreed to pay $175 million to the states and $100 million to the CFPB in civil penalties.
And, starting in January, Equifax “will provide all U.S. consumers with six free credit reports each year for seven years,” the FTC said. That’s in addition to the free annual credit reports that Equifax, and the two other nationwide credit reporting agencies — Experian and TransUnion — currently provide.
“Equifax failed to take basic steps that may have prevented the breach,” FTC Chairman Joe Simons said in the agency’s announcement. “This settlement requires that the company take steps to improve its data security.”
The FTC alleges that Equifax “failed to patch its network after being alerted in March 2017 to a critical security vulnerability” and that the company didn’t discover that its database was unpatched until four months later, when it detected suspicious traffic on its network. Multiple hackers were able to exploit the vulnerability, the FTC said.
In a statement, Equifax called the proposed settlement “a positive step for U.S. consumers.” Equifax Chief Executive Officer Mark Begor said the $425 million consumer fund “reinforces our commitment to putting consumers first and safeguarding their data — and reflects the seriousness with which we take this matter.”