Equifax Lobbied to Kill Rule Protecting Victims of Data Breaches

http://www.ibtimes.com/political-capital/equifax-lobbied-kill-rule-protecting-victims-data-breaches-2587929

by Dowwie • 9 years ago

893 167 9 years ago

Top193• 9 years ago

Wow if anything this is quite worse than the article says.

You can read Equifax's original letter in all of its Orwellian double-speak: https://www.regulations.gov/contentStreamer?documentId=CFPB-...

It's absolutely shocking to me how many times they use the words "serve the public interest".

The sell-out that wrote that letter btw is this guy: https://www.cov.com/en/professionals/s/david-stein

Top193• 9 years ago

oh man even worse this guy used to work in regulation for the government as part of the Consumer Financial Protection Bureau. Such a clear case of "regulatory capture", or the process where former employees of regulatory agencies leave to go reveal all their thinking and decision making tactics to the highest bidder.

amluto• 9 years ago

That's not really what regulatory capture means...

ethan_g3• 9 years ago

To be clear, regulatory capture is when the regulator advances the interests of the industry rather than of the public. Revolving door is a separate issue.

There's an interesting argument that the revolving door actually prevents regulatory capture through encouraging regulators to be more strict. The idea is that the more onerous the regulations, the more desireable it is for corporations to hire former regulators who know the system. "Keep your friends close, and your enemies closer."

Matt Levine's take on it: https://www.bloomberg.com/view/articles/2014-06-26/strict-re...

smsm4210• 9 years ago

former employees of regulatory agencies leave to go reveal all their thinking and decision making tactics to the highest bidder.

This implying thinking and decision making tactics of regulators should be some kind of closely guarded secret? These people are essentially writing the laws that rule our economy, I'd think if anything should be public that's their thinking and decision making tactics.

maxxxxx6• 9 years ago

Fun fact: Obama's attorney general, Eric Holder, works at the same firm. These guys are the embodiment of the revolving door.

ohthehugemanate• 9 years ago

Well here's your chance to agree with Donald trump: he made everyone sign an ethics pledge that they would not lobby within 5 years of their tenure in government. https://www.whitehouse.gov/the-press-office/2017/01/28/execu... getting Congress to pass a law that puts some teeth behind the promise is another question.

wnevets3• 9 years ago

fun fact: it was republicans equifax lobbied.

rayiner3• 9 years ago

Holder is not on this letter. And the letter was sent to the CFPB. Holder never worked at CFPB, which has very different jurisdiction than the DOJ. So what exactly are you alleging?

sillysaurus35• 9 years ago

The sell-out that wrote that letter btw is this guy:

I don't think it's a good idea to post someone's personal information in such a flippant way. He's not a public official and the whole point here is to witch hunt him. It comes up with his name, phone number and email address.

yardie2• 9 years ago

He's a lobbyist. Every interaction he has with the government is a matter of public record. If he felt he didn't want that information public then he shouldn't be a lobbyist.

cabaalis• 9 years ago

Doxxing is a toxic problem on the internet. However this is not really his "personal" information. It's his professional contact information, which he publishes freely, and uses to attempt to persuade government officials. Contacting him professionally and non-aggressively is a perfectly fine thing to do.

smhost• 9 years ago

We own this document.

late2part3• 9 years ago

I think it's good idea to link to public documents that companies put up on their public web page.

I think this 'dox' does not mean what you think it means.

EGreg• 9 years ago

Whatever information is at that public link is info posted by the guy or his employer. It's not doxxing him. It's merely linking to a public webpage that the person themselves approved.

jMyles3• 9 years ago

We live in a civil society in which people who advance opinions (or agendas) which affect the public are held to task amidst public debate.

That's not the same thing as a witch hunt.

samstave• 9 years ago

>>David Stein advises clients on retail financial services, credit reporting, financial privacy, payments, fair lending, and technology and e-commerce issues. He assists banks, non-bank lenders, consumer reporting agencies, payments and technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and transactional matters.

Notice hw he in no manner of speak "assists" any of the consumers/users of said services?

This guy is a shill POS.

smsm4210• 9 years ago

Why you call him a "sell-out"? He seems to be professional consultant. His main argument seems to be that CFPB does not have legal right to enforce the regulations he is talking about. That may be true or false - I have no idea, for that one needs to be a lawyer specializing in regulation law and parse the documents establishing CFPB and all accompanying regulations and caselaw. Which is way beyond my abilities, and I suspect, most of people here. But how it is "Orwellian"? He also raises a very correct argument that considering only benefits of successful class action and not the costs of the litigation and the fallout for both consumers and credit industry is just wrong. I mean, if you win $10 from successful lawsuit but would be forced to pay $20 more next time you need a credit check (numbers are just an invented example, of course), then this setup won't be worth it for you.

Again, his point may be wrong - maybe benefits of class actions are much larger than the costs - but this point is certainly in no way is "Orwellian". And if he is right, avoiding such regulation would definitely be in the public interest, in a very direct sense of the term. We have tons of regulations which serve as nothing more than a feeding ground for unsavory opportunistic plaintiff lawyers, with no benefit for purported victims (which get peanuts while lawyers are getting millions, and often the lawyers just buy plaintiffs for minuscule sums in order to mass-file lawsuits) and huge costs for everybody else. Last thing we need is more of these.

joe_the_user2• 9 years ago

He also raises a very correct argument that considering only benefits of successful class action and not the costs of the litigation and the fallout for both consumers and credit industry is just wrong. I mean, if you win $10 from successful lawsuit but would be forced to pay $20 more next time you need a credit check (numbers are just an invented example, of course), then this setup won't be worth it for you.

This argument confuses a payoff to plaintiffs with costs to the credit bureau's customers - but the plaintiffs would not be the customers of the credit bureau but everyone monitored (involutarily!) by the credit bureau.

Just as much, the purpose of the state allowing a lawsuit would not be to give money to the plaintiffs but rather to give the credit bureau a disincentive for doing what they did - manage their subjects' (now victims) data poorly.

Which is to repeat what other have noted - the average American isn't the credit bureau's customer, they are the credit bureau's product (the customers are employers and landlords). If having a secure credit-check system costs more, let the credit bureau's actual customers pay more.

And sure, landlords sometimes pass credit-check costs on to tenants but that's just one more part of the whole abusive system that it would be nice to see reigned-in (though naturally I'm not optimistic).

rdlecler1• 9 years ago

I mean, if you win $10 from successful lawsuit but would be forced to pay $20 more next time you need a credit check

Yes but he competing agencies who don't get sued can charge less and put these guys out of business.

syshum3• 9 years ago

So your argument is that because the credit reporting companies may raise prices as a result of being sued for their bad actions we should prohibit anyone from suing them and allow them to operate with out any legal liability.

They should be allowed to create databases of ruin, not secure those databases, sell this data to who ever and no one should have any legal recourse because prices might go up if they were found to be liable...

Really? That is your position

I have a problem with these credit reporting agencies even being legal in the first place. I have a problem with the fact I have almost no control over the data they collect, and sell about me, I have a problem the fact they can sell this data about me to whom ever they wish with out my permission, and I have problem with the fact they charge me to access this data in any meaningful or real time manner, sure they are legally required to give me a report 1 time per year, a regulation they also tried to kill, but if I want meaningful access I have to pay them a monthly fee to access my own data.

So it is safe to say I 100% disagree with your position, these credit reporting agencies should face bankruptcy for breaking the public trust. This data breach should mean Equifax as a company is dissolved, unfortunately due to flawed and unethical arguments like the one you are making this company will likely make a profit off this data breach

VeronicaJJ123• 9 years ago

Is using words like "sell-out" for a professional doing his job consistent with HN policies?

This is a genuine question and not a rhetorical one.

kartan• 9 years ago

I will like to know what's the ethical standards of the people that are trying to push for this legislations. Do they realize that they can be victims themselves of this kind of abuse? I guess that it's the tragedy of the commons. They can suffer the consequences, but they are ripping all the benefits.

When I say the Ferengi* in Star Trek, I found it hilariously unrealistic. Nowadays the possibility of corporations with rights but without responsibility is a scary possible future. Reality can surpass fiction.

* https://en.wikipedia.org/wiki/Ferengi

ransom15384• 9 years ago

Question. Can't we just let this company die? Do we really need a new law created by congress (EG HIPAA 2.0). Wont this just destroy the ability to create startups quickly? I understand it will help lawyers get fat and happy, but enforcing 'privacy' laws would be a trolling circus.

samfisher832• 9 years ago

Do I really want a startup doing this stuff? Iterate fast and break things? I would rather just have a heavily regulated industry with a lot of checks and balances handle very important data like this. Why could you even access the core databases from the front end? Why isn't the data on completely separate server where all queries are completely scrubbed and verified?

ransom15384• 9 years ago

Heavily regulated like: airlines, healthcare, public schools, prisons and drugs?

anigbrowl7• 9 years ago

Those are interesting questions, but distract fromt he central one of just why we should continue to let Equifax exist.

g0510515• 9 years ago

What do you mean, "let it die"? Do you honestly think there's even a shred of possibility that Equifax would go out of business?

ransom15384• 9 years ago

I don't think it will be long until the data is sold, then some group figures out you can program with the data + curl + facebook and automate applying for loans and tax refunds in mass. There could be millions of erroneous loan applications, tax refunds, business filings, car applications. Then! Law suites, government inquiries, etc. They don't sell oil - money will run out.

anigbrowl7• 9 years ago

It's easy to put a company out of business. All that's required is the political will to do so.

umanwizard• 9 years ago

Wont this just destroy the ability to create startups quickly?

Why does this matter to anyone but startup founders?

ransom15384• 9 years ago

Because monopolies are bad.

late2part3• 9 years ago

Perhaps the world would be a better place if Equifax went out of business. The other two members of the oligarchy could easily shoulder the load.

foobiekr• 9 years ago

there is no reason to believe the others are better.

Ensorceled• 9 years ago

They might get better if they know the consequences of bad behaviour is bankruptcy.

Lich• 9 years ago

Exactly. The concept of credit score should be replaced with something better, or just kill the idea.

stephengillie2• 9 years ago

Were a blockchain used to replace this industry, how would we compensate the miners? Would this be a good use-case for Etherium and Gas?

JumpCrisscross3• 9 years ago

Were a blockchain used to replace this industry

How would this work? Make everyone's personal credit details public?

Twirrim• 9 years ago

There's more than just 3 credit agencies, it's just that those three are the most reliable of them for credit reports. Given all the complications people have with even those three, it really doesn't say much for the rest of the industry.

The odd thing is, I never had to worry about this stuff in the UK. There's no notion of a credit score or centralised credit agencies that I needed to worry about. Most loan etc interactions take place with your existing financial institutions who already have your information on record.

nimish• 9 years ago

Uhh there totally is a credit score and reports in the UK. In fact Equifax and experian are two of the major agencies in the UK. So you aren't in the clear.

amyboyd• 9 years ago

There definitely are credit ratings in the UK! Try taking out a new credit card or loan or even getting a phone on contract -- they will almost always run a credit report check.

Just Google "UK free credit report" -- there are websites like Noddle that will show you your report for free.

smsm4210• 9 years ago

So what if you want to interact with an institution you never worked before - what happens? I.e., you move in to a new city and want to get a credit card?

ionised• 9 years ago

The odd thing is, I never had to worry about this stuff in the UK. There's no notion of a credit score or centralised credit agencies that I needed to worry about.

This the opposite of how things are here in the UK.

I'm wondering how you've not encountered Equifax, Experian, Noddle and the other credit reference agencies in the UK before.

Even an application for a mobile phone contract in the UK will definitely end up going through these agencies at some point, and your bank most certainly will consult them when applying for a loan.

nonamechicken• 9 years ago

Unfortunately, we already got Equifax and Experian in India. https://www.bankbazaar.com/equifax/equifax-cibil-experian-hi...

calvinbhai• 9 years ago

CIBIL is Transunion. So, all there are in India, along with 4th one Highmark

wfo2• 9 years ago

Or just delete all 3 from the earth, physically destroy all of their data storage media and let people make loans the way they always have for millennia, without three unaccountable private behemoths stealing and hording private data on every citizen then charging them to see/access/protect it, then cutting costs around security and getting all of it stolen. They do not need to exist and their services are a net negative on society.

greedy_buffer3• 9 years ago

And a big fuck you to everybody that has made efforts and sacrifices to improve their credit rating, they can take the same (higher) interest rate as everyone else?

richdougherty2• 9 years ago

let people make loans the way they always have for millennia

I.e, hardly make any loans at all! Most people agree that access to credit has greatly increased the wealth of our society. Not everyone agrees - but I believe this is the consensus.

They do not need to exist and their services are a net negative on society

Perhaps, perhaps not. The more information that a lender has about a potential borrower the more specific they can make their loan assessment.

Without a credit history, lenders will have to rely on averages. Some people will win from this (e.g. people who "look" like good borrowers on the surface) and some will lose (people who "look" bad on the surface, but have a good history).

The likely outcome if we remove this background information from a lending check will be more misallocated credit.

To be clear, I'm not really arguing that "credit agencies" in their current form should exist, but some sort of information about borrowers is useful to improve allocation of resources. Perhaps each person could manage their own signed Merckle tree of information...

smsm4210• 9 years ago

Less players in already highly monopolized business is better? How exactly?

nielsbot• 9 years ago

Maybe entrust this function to a government agency? A least they wouldn’t be in the business of selling your information—i assume that happens in some fashion under the current system but maybe someone can clarify?

syshum3• 9 years ago

The government is not in the business of selling your info?

Why is it then the government has setup massive databases of public information records that anyone to get a copy of for a nominal fee...

The government collects and sells more information about you than the credit reporting agencies do...

Hell the government is a large source of data FOR the credit reporting agencies, they correlate government data with data they get from Lenders.

Trusting the government is just as bad as trusting these companies

pmiller2• 9 years ago

Well, I think if you compromise the identities and credit files of 150m+ Americans, "full disgorgement of revenue" is a fair punishment.

KGIII5• 9 years ago

I wonder if this act can be used in court to demonstrate intent to remain negligent? The idea being that they lobbied for this because they had decided to not invest in better security.

glasz• 9 years ago

so i have been sort of monitoring this equifax thing. yesterday or the day before i was thinking "let's see what the aftermath brings to light"...

let's reflect for a moment: biggest leak of personal data of us citizens - right after the opm debacle. the same company funds strategies detriment to its customers.

i bet everybody feels like it can't get any worse.

i'm not very old, limited experience but i will predict, brace yourselves, this will go on and on. _nothing_ will change because people don't fucking care and the minority who does care does not have the electorial power it needs to change this system.

i'm waiting for the same thing to happen in germany. it's even worse here because virtually only one company has the monopoly over private credit ratings. everybody is annoyed and _nobody_ cares. we have major elections this month and all those sheep will vote safe.

this is going to be fun. good luck over there, friends.

jimjimjim• 9 years ago

that place is evil.

Mister Burns style evil.

evil should be punished not rewarded.

(i am already familiar with the phrases: all corporations are like that. everyone is doing it.)

justinjlynn2• 9 years ago

This type of behaviour shouldn't be surprising at all. Corporations are, on the average, amoral -- a result of human group behaviour. As with wild animals, one doesn't get mad at them for following their instincts -- yet, one shouldn't hesitate to carry a gun lest they themselves become lunch.

transitionnel• 9 years ago

Thanks for the grounding simile.

Everyone gives something to take part in and benefit by society. Corporations form, and seem to refund to their members all that they gave and occasionally more. We do not measure the externalities well, only the benefits. An externality estimator would be a great economic tool, does anyone know of one?

justinjlynn2• 9 years ago

Some might say that this is a function of government -- that is, the collective will of society forcing corporations and/or individuals to take into account otherwise hidden externalities. Though this is a somewhat contentious view, it makes sense to me.

wallabie• 9 years ago

Boy, the IBTimes has always been a terrible place to read articles, especially with its autoplaying videos, but now when you scroll down (after having stopped the video of course) it inexplicably jumps to the lower right corner of the screen and then PULLS the article to the top of the screen where the video used to be. So while you're reading and scrolling, the article just jumps away from you and you lose your place.

Incredible. How anyone thought this is good web design is beyond me. Then again, IBTimes has always been a really shitty place for journalism overall.

lefstathiou• 9 years ago

I selfishly prefer that we limit the damages that can be sought from businessss by victims of cyber crime. I don't have the resources and capability to fight against state sponsored hackers, neither does the NSA, any major corporation or anyone on HN. It would be nice to know that I won't be risking jail or bankrupting my company by bringing my services to market. The call to arms to punish these companies can have far reaching ramifications on the cost of services and ones willingness on the margin to build them.

emodendroket5• 9 years ago

Well you can't say lobbying doesn't have great ROI.

whataretensors• 9 years ago

I had my identity stolen 10 years ago. 6 months ago I finally had the last of it wrapped up. I hope. It was a miserable experience that costs a ridiculous amount of time, money, and effort to clean up. And it seemed completely random.

This breach is likely worse than anyone can predict. It could lead to a near unlimited amount of identities for organized crime groups.

To illustrate, my wait times on the phone to the IRS was usually between 1-3 hours(during off-peak seasons too).

At this point it might be worth scrapping the social security system and switching to private keys.

Equifax Lobbied to Kill Rule Protecting Victims of Data Breaches

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