Economy

Senate Dems Propose Bill to Penalize Credit Report Agencies for Breaches

Senate Dems Propose Bill to Penalize Credit Report Agencies for Breaches”

"Our bill imposes massive and mandatory penalties for data breaches at companies like Equifax - and provides robust compensation for affected consumers - which will put money back into peoples' pockets and help stop these kinds of breaches from happening again". "The first one is, Equifax would be paying a penalty that could be over $1 billion for its breach, but more to the point that would be the warning to Equifax and every other credit reporting agency - that if you do this, you are not going to walk away unscathed, and that means the credit reporting agencies will have a real reason to invest much more heavily in security". Mark Warner of Virginia introduced a bill Wednesday that aims to make data breaches hurt companies' bottom lines.

As the LA Times notes, the Data Breach and Compensation Act would also "add a $50 fine for each additional piece of compromised personally identifiable information for each consumer". It also would establish a new Office of Cybersecurity at the Federal Trade Commission, and charge it with monitoring cyber security at those companies. Half of any total fine could be used to compensate any consumers affected by the breach. Meanwhile, the Democratic duo would empower the FTC to probe and regulate the data security practices of credit-reporting agencies. Elizabeth Warren of MA and Mark Warner of Virginia, places credit reporting agencies under the watch of the Federal Trade Commission and establishes a brand new FTC Office of Cybersecurity. The credit scores they compute affect consumers' ability to purchase cars, rent apartments, obtain loans and more - but the watchdog FTC is limited in its oversight of the industry. The National Credit Federation, a United States credit fix biz, left 111GB of customer data on an open Amazon S3 bucket for thieves to find, although fortunately security researchers got there first and shut down that hole.

Former Equifax CEO Richard Smith, who stepped down after the breach was revealed, testified to Congress previous year and blamed the security failure on one person who had since been fired. Warren, in fact, had been a key driver of that idea.

The breach resulted in bipartisan outrage on Capitol Hill and the resignations of the company's chief information and security officers.

More news: Train Babcock Advisors LLC Cuts Position in Corning Incorporated (GLW)

"In today's information economy, data is an enormous asset".

The bill from Warren and Warner shows the lawmakers are still angry about the Equifax breach, said Jaret Seiberg, a Washington policy analyst with brokerage and investment bank Cowen & Co.

"If companies like Equifax can't properly safeguard the enormous amounts of highly sensitive data they are collecting and centralizing, then they shouldn't be collecting it in the first place", Warner said in a statement.



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