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Equifax is a $700 million data breach settlement, traces of criticism, and calls for new regulations

WASHINGTON (Reuters) – a Credit-reporting company Equifax Inc (EFX.(N) pay up to $700 million to settle claims it broke the law, and with a huge to 2017 data breach and the repayment of consumer harm, in a landmark settlement, which could spur new data on the consumer’s rules and regulations.

The largest-ever settlement for a data breach is approaching a multi-probe Equifax Federal Trade Commission, the Consumer Financial Protection Bureau, and virtually all state attorneys general. It is also in a pending class-action lawsuits against the company.

Shares in Equifax, that is one of the three major credit reporting companies, which is an increase of 0.8 per cent in late trading on Monday.

About 147 million people, including Social Security numbers, and driver’s license data, is adversely affected by the breach, one of the largest in the history. The hackers have never been identified.

While at Equifax, said on Monday it saw no evidence that the stolen data has been used in identity theft, the regulators said that the company is not doing enough to protect the data and misleading the consumer, no matter how safe it is. She ordered Equifax to set aside the resources to pay back the the consumer who have spent the time and money to protect themselves as a result of the breach.

The company will take a $300 million to the restitution fund, which could be up to $425 million, depending on how many people file claims. Only those consumers who are able to demonstrate that they have suffered a direct cost of the breach, or an identity theft, or through the purchase of credit monitoring services, they will be eligible for a refund, which will be limited to $20,000 per person.

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Equifax’s CEO is Mark Begor, told reporters on Monday that he expects the first $300 million, which will cover the cost of a decade of free credit monitoring to affected consumers, would be sufficient. In an interview on Monday with CNBC, Begor said the fund could be up and running by the end of the year.

In addition, the company will pay a $175 million penalty to the united states, and $100 million for the WORK.

Consumer advocates said the settlement was modest, given the huge number of people that will be affected by it.

“It’s a good value, and not as a penalty,” Ed Mierzwinski, executive director of the Washington-based U.S. Public Interest Research Group, said in an e-mail. He added that the consumer does not have to jump through hoops in order to get compensation.

Others questioned whether the fund would be sufficient, having regard to the long-term risks of having a Social Security number is exposed.

“A major concern is the long-term consequences of the Equifax breach. The scheme provides some compensation, but there is a risk of identity theft, it is for eternity,” said Chi Chi Wu, a lawyer at the National Consumer Law Center.

FILE PHOTO: the use of Credit cards, a chain and an open padlock to the front side of the display Equifax logo, in this picture, the 8th of September 2017. REUTERS/dado Ruvic/Illutration

Speaking to reporters, the COMMISSION’s Chairman, Joe Simon, said that the agency would also impose a financial penalty, but the law does not allow companies to be fined for the first offence, a matter to which he has called on Congress to solve the problem.

“Fortunately, the other agencies were able to fill in the gap in this period of time. However, under different circumstances, or future violations will not be subject to the civil penalties, which will send the absolute wrong message about the strike,” he said.

A spokeswoman for the Massachusetts attorney general, who, along with gary, Indiana, is not a party to the settlement, said the case of the company, it was going on. “Equifax must pay a fine that is proportional to the worst security breach in American history,” she added.

OF ANY LAW,

Equifax is listed in at least 2017, that a security breach had compromised the personal information, including social security numbers, of the 147 million people.

It is a scandal and sent the company into turmoil, leading to the exit of the former chief executive, Richard Smith, and several congressional hearings as the company’s slowness to disclose the breach, and the security measures that have been challenged by the administrators of the law.

Policy-makers and consumer groups have questioned how the companies are able to collect so much private data, sparking efforts to enhance the consumer’s ability to access their information. Both the Senate Banking and Financial Services committee is considering legislation that would require companies to have a better level of protection of the information.

FILE PHOTO: Credit-reporting company Equifax Inc. the offices are pictured in Atlanta, Georgia, USA, September 8, 2017. REUTERS/Tami Chappell

“We need structural reforms and increased oversight of credit reporting agencies in order to ensure that this never happens again,” Democratic Senator Mark Warner said in a statement.

Begor, told reporters on Monday the company was overhauling the processes for the customers in the first place, and is committing $1.25 billion to bolster the security of the data.

Equifax has also agreed, as part of the settlement, with a number of new measures, including the assessment of the security of the policies pursued by a government-appointed third party. Equifax, the board also must certify annually that the company has complied with the provisions of the settlement agreement, and may be liable to a fine if not.

Report by Pete Schroeder; additional reporting by Katanga Johnson and Nate Raymond; Editing by Peter Cooney, Tony Price and Nick Zieminski and Jonathan Oatis

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