U.S. Senator Elizabeth Warren said one of the biggest injustices of the Equifax Inc. hack is that the company might actually benefit from the fact that a majority of Americans' personal data is now in the hands of criminals.
"Equifax will be just fine," Warren told former Equifax Chief Executive Officer Richard Smith at a Senate Banking Committee hearing Wednesday. "Heck, it could actually come out ahead."
Warren, one of the finance industry's most relentless critics, noted that the company advertises fraud-protection services and profits from selling consumer-data that it promises to keep safe. On Equifax and its competitors, the Massachusetts Democrat said she wants the "entire industry to be transformed."
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Smith responded that after the breach, Equifax is offering victims free fraud protection tools and other services.
Making Millions
Warren said that may be true, but once the free periods expire, many consumers will probably choose to start paying for the services. She said there are several ways Equifax is poised to make "millions of dollars off its own screw-up."
Smith was facing his second of four congressional hearings this week on a breach that led to the theft of 145.5 million Americans personal data, including Social Security numbers and drivers' license information.
After such a staggering intrusion, Senator John Kennedy expressed surprise that Equifax is getting new business, including from the federal government. The Louisiana Republican noted that Equifax had just received an Internal Revenue Service contract that's estimated to cost more than $7.2 million to verify taxpayer identities and help with fraud prevention.
That's like giving " Lindsay Lohan the keys to the minibar," Kennedy quipped.
Smith said that to his knowledge the IRS deal was a renewal of existing work Equifax does for the agency, and not a no-bid contract.
'Abject Failure'
The contract also drew criticism Wednesday on the other side of Capitol Hill during a hearing held by the House Ways and Means Oversight Subcommittee. Representative Jackie Walorski, an Indiana Republican, called the IRS's decision to award business to Equifax "an abject failure."
The IRS defended the move.
"Following an internal review and an on-site visit with Equifax, the IRS believes the service Equifax provided does not pose a risk to IRS data or systems," the agency said in a statement.
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