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Equifax Faces Multibillion-Dollar Lawsuit Over Hack (bloomberg.com)
1345 points by jameslk on Sept 8, 2017 | hide | past | web | favorite | 648 comments

I'd love to see the $70B number pan out (though $500 per person is less than the damages, I think) -- Equifax is a $17B company, and would presumably stop existing if that happened.

On the other hand, these things always settle out of court, and Equifax certainly won't settle the suit for more than they're worth.

I said it elsewhere, but I think the right response is to opt out of the class, and sue for $1000 in small claims court. If ~15% of the class does this, they are out of business, and lawyers don't get a dime of the $1000.

Also, I'd love to see a new non-profit website that automated the paperwork.

This class action will likely be settled in the same way the Ticketmaster case was settled ... with a coupon book good for 2 free credit reports.

To be fair, class action suits aren't really about recovering damages for the class members. Or at least, not entirely. That's almost incidental. Rather, they're most often about leveraging a large class of injured parties--whose injuries are usually relatively minor on an individual basis--to force a change of behavior by adding up all of those small injuries.

The cost of pursuing each claim individually would usually be sufficiently high as to make pursuing a claim unviable. The behavior would remain uncorrected, and the injured parties would receive neither compensation nor the knowledge that the behavior has been altered or eliminated. Nobody wins in that situation.

And while it's almost inevitable that discussions about class action suits will involve complaints about the lawyers fees, that's not really fair. Mass tort litigation is complex and involves significant investments of time and resources on the part of the attorneys involved. Especially if they actually make it to trial. It might seem unfair at first glance, but it enables the class to access the legal system and justice where it otherwise would not. They may be imperfect, but they're a hell of a lot better than the alternative and have had a profound positive impact on our society.

To be fair, class action suits aren't really about recovering damages for the class members. Or at least, not entirely.

That was exactly what they were supposed to be about. The way it usually works out, however, is that the lawyers don't really negotiate on the same side of the table as the class and the class members end up with very little. The lawyers, however, get their fees.

That's why everybody gets pissed about it.

There are other legal remedies to force a change of behavior. If the lawyer wants to use my name (as a class member) for leverage in the suit, he or she should be representing me. The class action is something that is supposed to be for the class members' advantage- working as a group for legal remedy. The tradeoff is you don't get as much legal remedy as you may have had you footed the entire bill and risk of a lawsuit yourself. But some of the negotiated remedies are, indeed, a joke.

>That was exactly what they were supposed to be about.

No, they really aren't, because as the parent says class actions are appropriate where the harm to each individual class member is small, but the small harm is spread out to many people. You as an individual were not harmed much, so you as an individual would not collect much even if you went it alone and recovered 100%. Litigation doesn't (generally) yield more than the harm you suffered.

Besides, if you want a lawyer to represent your interests alone, then you are free to not join the class and pursue your own individual case with the lawyer(s) of your choosing.

Believe it or not, they really are supposed to be about this. Here's a writeup [1] speaking about the Supreme Court's ruling on the matter:

"Purpose? According to the U.S. Supreme Court, the “principal purpose” of class actions is “the efficiency and economy of litigation.” [4]The Court has also noted other justifications for class actions, including:

    the protection of the defendant from inconsistent obligations;
    the protection of the interests of absentees;
    the provision of a convenient and economical means of disposing of similar lawsuits; and
    the facilitation of the spreading of litigation costs among numerous litigants with similar claims.[5]

In other words, people whose claims might be too insignificant to litigate alone can band together. The class action device can eliminate redundancy in the judicial system, streamline litigation, and in some cases, create significant institutional change. "

[1] https://apps.americanbar.org/litigation/litigationnews/pract...

>pursue your own individual case with the lawyer(s) of your choosing

Fewer people than most realize are actually able to do this. Good lawyers don't generally take contingency cases, and if the case is even remotely involved, fees quickly reach to six figures.

Perhaps worse is the stress. Once initiated, you have virtually no control over the process, and it can take over your life. The motions and counter-motions, delays and hearings will wear you down. If the adversary is much better-funded, then they can make it nearly unbearable.

The legal system is not what most people imagine, especially those who flippantly threaten to sue. You have to go through an action (or be close to someone who is) to really get that. Engaging is stressful and costly and, unless you're a combative type with deep pockets who just loves to fight, you'll likely feel like you lost, no matter the outcome.

This, as much as anything, is why class actions are so prevalent.

> If the lawyer wants to use my name (as a class member) for leverage in the suit, he or she should be representing me

If you're paying them they're representing you. If they spend a single client's or their own time building a case, they're not representing you. They are representing your class. If you want to be represented, opt out and hire a lawyer.

> That was exactly what they were supposed to be about. The way it usually works out, however, is that the lawyers don't really negotiate on the same side of the table as the class and the class members end up with very little. The lawyers, however, get their fees.

The lawyers are getting their fees to pay for the service of causing class-action suits to happen. Even if the remedies for a class member are a joke, the amount the company pays is, supposedly, not a joke (and yes, a good amount of that is probably paying those lawyers), and that's supposed to be a deterrent for other companies who are thinking of making the same mistakes.

Whether this works out in practice is debatable, but the current system is coherent in theory.

> They may be imperfect, but they're a hell of a lot better than the alternative and have had a profound positive impact on our society.

No, it isn't better than the alternative. The alternative is to have regulators selected and overseen by elected officials regulate the behavior of companies. We instead of a system of regulation by self appointed ad hoc lawyer-regulators negotiating settlements they think will get past the judge overseeing their case and allow them to collect a fee.

The latter is perhaps better than nothing, but it isn't better than the alternative which happens to be in place in the rest of the developed world.

Regulators selected and overseen by elected officials aren't a foolproof solution either. Sometimes you end up with Scott Pruitt [1] running the EPA, whose objectives are apparently a) denying that climate change exists, and b) dismantling any environmental protections that businesses find inconvenient.

The self-appointed lawyer regulators at least have an incentive to do their jobs: they get a bunch of money.

[1] https://en.wikipedia.org/wiki/Scott_Pruitt

He didn't say foolproof; he said better.

That was his point. Pruitt is not better.

Yes because regulation is working out really well

That is why I have plenty of competition for Internet Access and Net Neutrality is vigorously enforced

That is why the FTC routinely issues fines for False Advertisers for all the false claims that are made daily in ads

That is why there are plenty of bankers in jail for crashing the economy in 2007,

Government regulation is grand

So vote for people who actually want to competently regulate, and work to encourage others to do the same.

Paraphrasing, we are currently getting the regulation we deserve - good and hard.

If you believe democracy is for people. Then you are mistaken. Democracy simply means more than one entity fighting for power. Usually both of them have their own agendas and only give a shit when it’s time to vote. And we all know lying, backstabbing and spreading propaganda on Facebook and media channels is a much better way to win voters than doing what’s good for them.

The system was always a plutocracy and will always be.

>And while it's almost inevitable that discussions about class action suits will involve complaints about the lawyers fees, that's not really fair.

Of course it's fair. It's not like the members of the class get to shop around for cheaper lawyers. The class gets shit either way, they just have to decide if they hate the company more than the lawyers that charge the obscene percentages. And you can't make any kind of cost argument because a billion dollar case isn't anymore complex than a million dollar case. The whole point of it being a class is that it impacted everyone the same so the dollar figures don't change the complexity.

Attorneys' fees in a class action have to be approved by the court, and for large class actions the percentage fee tends to be lower than what a privately-retained lawyer would receive. The privately-retained lawyers in NTP's lawsuit against Blackberry got an approximately 1/3 payout of a $600 million settlement. 20-33% is quite typical in a pure contingency situation. Most court-approved fee awards in class actions that large ($100m+) tend to be a lot lower than that, in the 10-20% range. Courts usually will demand that attorneys submit their billing records (or summaries thereof) along with their fee petitions, and will regularly cut down any fee requests that exceed a certain multiple of what the attorneys invested in the case.

This case is typical: https://www.paymentcardsettlement.com/Content/Documents/Orde.... $5.7 billion settlement, about $500 million in attorneys' fees, or less than 10% of the fund. $160 million worth of time invested by the attorneys to get to that point.

> And you can't make any kind of cost argument because a billion dollar case isn't anymore complex than a million dollar case.

That's not true at all. Big dollar value cases involve either large harms to relatively fewer people, or relatively small harms to large numbers of people. The former kind of case often involves complex subject matter, such as financial transactions, medicines, etc. The latter kind of case often involves a very diverse class and complex issues of causation and damages. Consider the TicketMaster lawsuit: the basic theory of damages is that class members would not have purchased the tickets had they known that TicketMaster was marking up things like UPS charges. Well, clearly lots of class members would have purchased the tickets anyway. Coming up with a realistic damages model in that scenario is difficult. Furthermore, in big consumer class actions like that you've got class members in fifty states with fifty different sets of laws.

Is it weird to also observe that the opposition in a billion dollar case will be significantly more expensive to overcome than in a million dollar case? It seems obvious to me that billion-dollar cases would be more expensive to pursue.

Definitely. E.g. for a $1 million case, the defense likely won't even hire an expert. For a $1 billion case, you'll be responding to thousands of pages of expert reports prepared by half a dozen PhDs in various specialties (and deposing them, fighting over the admissibility of their opinions and the reliability of their methods, etc.). Not to mention that you'll get buried in discovery, etc.

Still, class attorneis will settle faster and for less. That often drives total comp and remedies a order of magnitude more than fees percents, like in the recent antipoaching litigation.

>Attorneys' fees in a class action have to be approved by the court, and for large class actions the percentage fee tends to be lower than what a privately-retained lawyer would receive.

>$5.7 billion settlement, about $500 million in attorneys' fees, or less than 10% of the fund. $160 million worth of time invested by the attorneys to get to that point.

How often to private retained attorneys get $320 million in pure profit. Additionally the 'time invested' already has income for all of the involved lawyers.

This is contingency work. The winning cases have to pay for the losing cases. When they lose, the lawyers invest $160MM worth of very real payroll and consulting fees and get nothing.

> It might seem unfair at first glance, but it enables the class to access the legal system and justice where it otherwise would not.

The fact that it requires so much expertise and money to "access the legal system" in this way is in itself incredibly unfair and unjust. It's a completely broken system.

Yeah, but how can that be solved? The law is very complex in any advanced country (I'd argue necessarily so), and requires specialists to navigate it.

Exactly. It's hard to measure the value of class actions without knowing how the behavior of companies would change without them. I expect we'll see that natural experiment play out now that arbitration clauses are commonplace.

Your first point is only sometimes valid as damages do depend on the severity of the injury, just as in any other case. See http://www.nytimes.com/1999/10/08/business/fen-phen-maker-to... for a class action suit involving serious injury.

Probably for good reason. $500 per class member is an insanely high damages estimate. 99.9% of people will suffer zero damages because their identities will not be stolen. Even the ones who do have their identities stolen will likely be made whole by the credit card companies.

The real damages here are going to be to the banks and credit card companies that will have to absorb the costs of all the fraud.

As to the Ticket Master case, you can read the complaint yourself and see if $5 or so per class member settlement value was reasonable: http://www.ticketfeelitigation.com/docs/Fourth_Amended_Compl.... The theory was that TicketMaster didn't disclose that it was marking up fees for things like UPS delivery and order processing, and that if customers had known they wouldn't have ordered the tickets. That's a weak damages theory, because customers don't care about line items they care about the bottom line. Either they'll pay $X for the tickets or they won't. Unsurprisingly, that weak damages theory lead to a small per-class-member settlement.

> Even the ones who do have their identities stolen will likely be made whole by the credit card companies.

Are credit card companies now in the habit of reimbursing consumers for the considerable time and headache required to sort out fraudulent charges caused by insecure data storage practices in the credit reporting agencies that the credit card companies contract with?

There are numerous reports of identity fraud causing a significant amount of trouble for the consumers involved, and as far as I know, not a one of them has ever received a letter beginning, "We're sorry for the time and trouble you went through to clear this up", with an attached check.

What headache? Get with Capital One, Chase, Citi, or one of the other big names. They are very professional about replacement cards and zero hassle.

Replacement credit cards are not the issue. Whoever has this data has the complete dataset to open new credit cards in your name, buy a car in your name, get plastic surgery in your name, etc.

The hassle will be convincing all those companies that you do not in fact owe them thousands, and there is no automatic protections for these types of harms.

Even worse, is if you don't immediately notice a new account on your credit report, that then goes to collections. -_- 10 years later and I still get threatening calls from the shadiest of shady "collection agencies"

Do you know if there's any way to "notice" these new accounts without having to freeze your credit or otherwise mess with the normal process for getting new credit? I just want a notification, nothing else.

Credit Karma seems to do that OK. Their score is wildly different from their supposed source though.

Oh yeah I don't need the scores, I just want notifications for new accounts. Cool, thanks! I'll check it out.

must be terrifying. sorry about that. but free money is free money.

> Are credit card companies now in the habit of reimbursing consumers for the considerable time and headache required to sort out fraudulent charges caused by insecure data storage practices in the credit reporting agencies that the credit card companies contract with?

It's not a "habit", it's the law. It doesn't matter how the fraudulent charges came to be. If a person disputes a charge and has evidence to show it's fraudulent, then by law the credit card company has to investigate, and deal with it.

It also makes business sense. CC companies make a ton of money with legal transactions, and an anti-consumer, pro-fraud reputation would cost them customers.

> There are numerous reports of identity fraud causing a significant amount of trouble for the consumers involved, and as far as I know, not a one of them has ever received a letter beginning, "We're sorry for the time and trouble you went through to clear this up", with an attached check.

Why would the bank or credit card company send a check? Presumably they're not the one who committed the crime, so why should they cover the damages?

I've had my identity stolen, and it was a PITA to clear up, but the bank and credit companies were reasonable about it, IMO. In a case like this, where it's easy to point at the Equifax breach and say, "See? This is how they got my info.", it's probably even easier to clear up, though I'm sure it's still a hassle.

Time. I'm pretty old, retired, and have a few bucks. Time is my most precious commodity, and I prefer to give it to those who deserve it.

I'm not sure how much I'd want someone to pay me for an hour of my time. Clearing up identity theft can take many hours. Those are hours I can spend bugging the missus, or even bugging you folks.

I am clearly not to blame for their data exfiltration. Who is going to pay me for my time? What is my time worth to them?

This is all theoretical. My credit has been frozen for a long time. It has been that way since the OPM hack. However, for the sake of expression, I point out that my time is pretty valuable to me. Those who steal my time are worse than those who would steal my property. I can insure my property, I can not replace my time.

This has been hitting me hard lately. I'm pretty young at the tail end of my 20s, job is finally stable enough not to worry about money, and have really started to realize how few free hours I can find in a week. Work and its on call rotation, obligations to the girlfriend and social circles, maintenance on the house and cars, bills that don't have an auto pay option.

Last month my auto registration sticker didn't show up in the mail after renewing it. A trip to the county clerk, then the sheriff's office to file a report, then back to the clerk to get another sticker took almost two hours. Stopping by the local bank to change my address after the online system locked my account for two incorrect password attempts took 90 minutes. 6 phone calls after a cancelled auto insurance policy made an auto draft the next month. My coworker has a pile of kids, two with medical issues, it seems like his wife has a part time job dealing with medical billing issues.

Most of these rambling examples aren't the fault of the organizing institution (unlike the Equifax leak at hand), but in the end individuals are bound by those institutions' organizational practices in their pursuit of normalcy. I don't know how it could be implemented or enforced, but at a certain point it feels like individuals should be compensated for suffering organizational incompetence or negligence.

I got lucky and sold my business when I was just 49. However, I worked a minimum of 60 hours per week, for years.

Which gets me to my response:

Cherish that time. I don't care about longevity, I care about maximum value. I may be content to die today, but I'm not content wasting time on something that is forced on me.

I don't regret much, but I do regret my time that was wasted by others. As I look back, I see do many situations where I could have disallowed that while still getting the same eventual outcome.

They do it on purpose and have no intention of fixing their administrative inefficiencies. They know most people don't have the patience for this crap so that discourages people from creating a hassle for them with problem/things that they have to do.

For instance, in a past life I may call up to question a charge on my cable bill. Now that I have more money, I don't waste my time on such nonsense. If the cable company wants to charge me an extra $20 for no reason, they can do so, because it's not worth my time to call them up and get shuffled between departments for 2 hours.

Last time a cable company charged me wrongfully (I wasn't even their customer anymore), I called my bank and had them reverse the charge, as well as block any future ones. Took me like 5 minutes. Now the only time investment I have is throwing their monthly threat letter in the trash about how they will cut my internet access if I don't pay up.

> It's not a "habit", it's the law. It doesn't matter how the fraudulent charges came to be. If a person disputes a charge and has evidence to prove they didn't make it, then by law the credit card company has to investigate, and deal with it.

But the time it takes on the phone to talk to an agent, review your records for legit vs illegit charges, etc. are not reimbursed, which is what they were on about.

> Why would the bank or credit card company send a check?

I think we're talking Target writing the check. Which they didn't exactly volunteer to do, but was covered in the class action at least: https://targetbreachsettlement.com/mainpage/CommonlyAskedQue...

"Even the ones who do have their identities stolen will likely be made whole by the credit card companies."

Fraudulent charges on a credit card are the least of my concerns. This opens us up to a lifetime of identity theft and insecure accounts of every sort. I'm not even sure how they can approach remedying the problem. Coordinate with the SSA to get 150 million people new SSNs at the least.

This is really the concern. With this level of detail, someone can open any kind of new account - not just credit card - dig into everyone's lives (or political opponents on social media for doxxing). And the threat remains in perpetuity.

There is mo way to even estimate the damage as some devious ways of it harming us may not even exist yet.

> There is mo way to even estimate the damage as some devious ways of it harming us may not even exist yet.

Scifi story idea:

Far future. Life extension possible. The government will provide it free (if you want it) - one time only though - when you are near the end of your first life. Upon extension, this technology also turns the clock back to renew you to 20 years old.

You're 78 years old, frail, ready to kick it, but decide to do the extension. You go into the clinic. Give them your information, etc.


We're sorry, you've already been rejuvenated before. We can't help you, unless you want to pay $$$$$$ for us to go ahead with the procedure.



Why would people need new SSNs? It was the credit industry that misused them as combination of unique identifier and authenticator, and that is not the SSA's responsibility to fix. The government even tried to curb misuse of the SSN, but it was not binding on private entities, and they just ignored it.

The solution, whatever it is, does not include anyone continuing to pretend that the SSN is now or has ever been suitable for any purposes other than for tracking government benefits managed by the SSA, and possibly also for tax filings with the IRS.

> other than for tracking government benefits managed by the SSA, and possibly also for tax filings with the IRS

... and all of the other government benefits, programs, or mandated activities, many (all?) of which demand your SSN. Are you even sure that the credit industry, i.e. banks, originally misused SSNs? I wouldn't be surprised if they were required, by the government, to use them, precisely because it is the closest thing to an official "unique identifier".

Some people also might be concerned with not receiving their SS benefits either, which isn't entirely far-fetched given that others might now be using it for nefarious purposes (like trying to collect their SS benefits).

> I wouldn't be surprised if they were required, by the government, to use them, precisely because it is the closest thing to an official "unique identifier".

I read something somewhere else (maybe on a different HN thread, maybe here?) that this was changed in 2000 for something called "red flag laws", IIRC.

So yeah - it is required.

You're absolutely correct. We should move to a well designed identity system. However I'd SWAG the development and deployment of such a system around 10-15 years if all of the involved parties were on-board. Equifax could provide the SSA a pile of money and the victims could have a reasonably effective defense against identity theft within months.

wouldn't it be simpler to make ssn number last only five years? it's a partial workaround, but would immediately help by reducing the attack opportunity time massively, along with making it standard to have variable ssn thorough the system and making it easier for people to just renew their after breaches like this, since the current bar for obtaining a new one is quite high

honestly this is only really an issue because organizations are using SSN as authentication and not just as identification, caused probably by the lack of a federal id scheme, compound by the inability to easily change the SSN itself as you would with an id document (which is why here ids are relatively short lived and we can get away with ssn equivalents that are for life)

Bingo. In sweden as example our birth date plus 4 unique digits is your nation wide id/ssn. So obviously your ssn is not exactly a secret and instead you also have to proove that you are you with a photo id or online 2FA id.

There's no such thing as loosing your ssn because it is already public.

> Even the ones who do have their identities stolen will likely be made whole by the credit card companies.

No one will be paid for their time wasted over ID theft resulting from this breach. That's what "made whole" would mean to me.

> 99.9% of people will suffer zero damages because their identities will not be stolen. Even the ones who do have their identities stolen will likely be made whole by the credit card companies.

The extent of the potential damages here isn't limited to credit card fraud. Having your SSN leaked along with your name, date of birth, every recent address you've had, etc. opens you up to a lot of other attack vectors.

Furthermore, credit reports can often inadvertently contain information that relates to one's medical history - you can request that this information be obscured or sealed in your report if you find it, but that means that certain medical information is also within the scope of the potential leak.

All of the identities have been stolen. It’s a matter of whether they’re used at this point.

True, but in the US you can not really sue for possible harms. You can only sue for actual harms which can be remedied by the court. Leaking your information isn't a harm the court can remedy. Abuse of the leaked information is a harm the court can remedy.

Fair point. I would argue that Equifax has breached one of the terms of the Fair Credit Reporting Act, and possibly other privacy regulations.

I don’t think that’s a generally accepted legal standard. It seems similar to saying that Edward Snowden and Chelsea Manning only released information, which the courts can’t remedy. If anything bad should happen due to that leak, then the courts can remedy that in the case of the people who committed those acts.

The government is clearly of the opinion that they can and should prosecute people for leaking information which could cause possible harms.

I’m clearly not a lawyer, but these scenarios seem pretty similar to my untrained eye.

The difference is that their intentional leaking of classified information as people with a security clearance is letter of the law illegal. The difference seems huge and obvious to my untrained eye.

To add to this, their acts were intentional. Yes, you're very right that they were very much illegal acts. However, it needn't be intentionally spilled classified information in order to be illegal. Under certain circumstances, even accidental 'spillage' is a felony. Negligent 'spillage' is also very much a felony.

I've been through quite a bit of training and held my clearance for years. I was a victim of the OPM hack. Well, I guess I still am a victim. Mens rea doesn't really apply when handling classified material/data. If it is accidental AND you report it properly, it's not jail - you are so losing your job, however. You also lose your clearance. It has been a while, but I'm pretty sure you lose it forever.

The State prosecuting someone for a crime is not the same thing as a private individual suing another individual for a tort. Basically everything is different: different rules of procedure, different rules of evidence, different standard of proof required, etc. etc.

> The real damages here are going to be to the banks and credit card companies that will have to absorb the costs of all the fraud.

This is not true at all. They simply reverse the charges. Businesses who accepted the fraudulent transaction(s) are on the hook for it. Anyone who runs a business and handles credit card processing can confirm this.

A bank 'absorbing' a cost surely means passing on that cost to consumers in some way.

If there are 140 million members then any settlement will be individually quite modest (Equifax has annual income of ~600 million dollars, so multiple years of all of it to get to even $10).

It does seem like any penalty for something like this should severely impact the ability of the company to operate though.

I suppose a $0 way to penalize them severely would be to force Equifax to allow individuals to opt out of having Equifax store information about them. Lots of people would do so without understanding that it might impact their ability to get a loan, but so what.

But that would also make Equifax's product not that appealing to the companies that would purchase it. So organisations would have to use one of the other agencies as well.

$500 may be high, but $100 would be more reasonable even for those that didn't have their identity stolen, I've already spent an hour researching the hack to figure out what to look for and whether or not I was included in the set of stolen identities.

Do you think that the FCRA punitive damages ($100-$1000 per person) might apply here?

Unlikely since it doesn't appear credit report-related data was leaked, only PII.

The leaked PII makes it trivially easy to obtain the credit report data

There was a class action suit because a company was marking up the cost of the goods / services they were selling? Isn't this just called business?

Most businesses include their markup in their displayed price. Ticket Master was displaying one price and then sneaking in an extra fee later in the process.

You mean, with a coupon book good for 2 free credit reports... except with ridiculous fine print that will prevent 99% of people from using said coupons...

... 2 free credit reports with the purchase of 3 or more credit reports at the usual price

Is that what the lawyers received for taking the Ticketmaster case?

One scenario would be SSN being massively used by pirates, so companies would stop trusting SSN altogether. Let's hope a startup creates a "proof of identity" service with a photo ID with a chip, a code, and an online certificate for tax purpose.

ah lovely "papers please citizen" and what happen when friend computer with all this proof of identity gets hacked.

Maybe the USA needs everyone to have a new ssn and ban with very strict penalties is use by any one other than the state and then only for highly restricted usages as it is in the UK

Considering that Social Security numbers are not secure, and were never intended to be secure, I favor this approach. Unless you’re the federal government, you shouldn’t know or care about my social security number. Idiots are always going to think SSNs are a good UUID, and I’m always in favor of punishing idiots.

almost 20 years ago when working for british telecom we where read the riot act an where told any non permitted use on NI numbers would be considered gross misconduct and you would be sacked on the spot.

> ah lovely "papers please citizen" and what happen when friend computer with all this proof of identity gets hacked.

While it doesn't solve the "papers please" aspect:

1. Card holds biometric data of person, plus PIN. Card is the only thing that holds this.

2. All card does is output "yes or no" if you are you.

3. You have or use a reader for authenticating who you are. The reader takes you biometric data (fingerprint scan, face scan, or something else), and has you enter your pin. It takes this info, hashes it, compares to the stored info, and outputs the "yes" or "no" answer.

Very basic thing here. 3-factor, and the data about you is never stored anywhere, and the card/reader combo does the rest. The data about you never leaves the card (in fact, it can't - it would be write only for that data).

We have all the technology to do this today. What we don't have is the will. So it won't be implemented.

I'm not saying the above is perfect - but it is 3-factor (what you are, what you have, what you know), and that is what is needed most. The information stays with the owner on the card. All transactions can only be done with the card on-hand to prove you are you. You can change the PIN at will, maybe even the biometric data - but both are write-only, and can't leave the card. The card can read in data (an image for the biometric data, and the code for the PIN), but all it does is hash that together, compare it to the stored hash, and output a yes/no.

I'm not saying the above is perfect, and I am sure I have forgotten something. But it - or something like it - is what we ultimately need. But we won't get it. Ever.

If the card outputs "yes" or "no" you are creating new security incidents just waiting to happen - proxying, oracular attacks, faux cards that respond improperly to the binary question, etc. This means that your system is actually two factor, a pin and biometrics. A pin is extremely weak, and for sure biometrics need to be designed and implemented properly.

Also, notice the other subtle dependency that was introduced with the PIN only kept on the card - the PIN might as well not exist.

This is all known. The issue isn't how to design a security system. The issue is the fly by the seat of the pants lack of security with deadline driven products. Those products only appear to implement a feature set and really don't work, just appearing to work in order to achieve the release exit criteria of a minimum viable product. This gets compounded by products hardly ever revisiting their earlier phases, choosing in this case to add new web features instead of hiring a security team.

True only if the papers are issued by government. A private or non-profit scheme, if hacked, could be abandoned within hours and replaced. To post this comment i had to present some virtual ID to a private organization.

Where are the blockchain proponents? Oh, right, this kind of thing isn't a pyramid scheme. It would be a lot of grunt work and wouldn't be worth a VC investment.

I can hear it coming now... A VC backed military contrator is right now creating MilChain and DarpaCoins.

And after some time it'll become apparent it was a CIA front, and ultimately only achieved to fund the latest insurgency in $PLACE

It isn't paranoia if one is right. Sadly, we are both right.

> I said it elsewhere, but I think the right response is to opt out of the class, and sue for $1000 in small claims court. If ~15% of the class does this, they are out of business, and lawyers don't get a dime of the $1000.

IANAL, but can't you only sue for actual damages not hypothetical damages? According to this [1] your identity with SSN is only worth $30 on the black market. To get $1000 out of them you'd probably need to have your identity actually stolen and prove it was stolen from Equifax.

[1] http://www.bankrate.com/finance/credit/what-your-identity-is...

The damage is not the cost of getting a new SSN, but the cost of verifying that your info is safe (still safe?). This is why companies routinely list the _cost_ of dealing with hacking incidents (scrub all the servers, pay people overtime, etc). I think it's fair to assign costs similarly for equifax.

Info monitoring is what, like $29.99 a month?

Perhaps reasonably ask for 3 years of monitoring, so $980

But those aren't actual costs incurred yet.

My SSN won't change for my lifetime, so really they need to pay that cost of monitoring. Equifax, you owe me $23,392.20. It's in your interest to pay upfront to avoid the cost of inflation.

> My SSN won't change for my lifetime

This breach, I suspect, makes that less likely to be true. After all, one of the few reasons a new SSN can be issued to someone who has one is “A victim of identity theft continues to be disadvantaged by using the original number”.


It would be interesting to see how they define "continues to" and "disadvantaged by" here. It sounds like it may be implying that multiple occurrences of issues need to happen and just knowing that your data's been breached, but not yet abused, could be insufficient qualifications for "disadvantaged by".

That's retail and the pricing seems highly inflated. Does anyone actually buy these services at that price point?

Credit real time monitoring should be an entitlement for those whose data is being collected.

You can sue for anything. They'll have to show up to respond, or you win by default regardless of whether your case is valid or not.

This would cost them a fortune.

I cannot believe that is how the court system works in any jurisdiction... are you commenting on the US?

Stress is a damage and mental health is valuable.

The tests for stress/mental health damages are very stringent.

Isn't Equifax protected from the class action by a few levels of arbitration clauses?

Arbitration clauses agreed to by who? Do most individuals have any relationship with the credit reporting agencies beyond having their private information siphoned up behind their back? (and trying to keep a handle on that, so that their "credit score" remains favorable?)

I never signed anything with Equifax, but they still have my information. I'm sure the great majority of the ~140M records they have are in a similar position.

Yeah, they ought to apply fraud alert status automatically to everyone who was compromised. Every credit application for the next five years requires they contact you personally for new applications.

Doesn't help for all the other issues this will cause, though.

Punitive damages.

There are no "punitive damages" in U.S. Small Claims Courts. Only "actual" (out of pocket) damages.

You can, however, put whatever amount you want (up to the small claims limit) in the initial paperwork. It would get reduced to actual damages if you won. But...big companies often try to settle with you before the actual court appearance. By padding it, you set an expectation that might help. They are likely to settle if the amount is less than the cost to have someone appear.

Sort of / not really.

I guess treble damages are not called "punitive" but they're also not "actual".


The GP was talking about Small Claims specifically -- I don't see anything on the linked page that refutes that. In fact, it seems like this applies very narrowly and only where specified by statute.

It was the best I could find. My understanding is that here in CA, if your landlord does not refund your deposit (or properly itemize legitimate expenses against said deposit) you can sue in small claims court and recover 3x damages, up to the small claims court maximum of $7500.

That said, I've never tried it, so it's possible my understanding is wrong.

But then you would have to show $1000 of actual personal damage, which I doubt few if any can, unless you're thinking Equifax will just settle these one after another. But they're just as capable of multiplying out how many of these will have to happen before the losses devastate them like you just did and at some point will actually show up and make you prove your case.

This is the genius of small-claims court. Equifax has to either send a representative (which would cost them more than $1000), or they lose by default. You don't actually have to prove anything.

It really isn't genius at all. At least in my state, either party can object to the small claims status by simply sending a letter. Then it moves over to normal court with normal lawyers. Already you are out the small claims filing fee (yes, you have to pay the court to even bring a small claims case).

Once in normal court, you would need to hire a lawyer, and they would just find some local representation. At this point, you would probably withdraw the case because it isn't worth that investment.

But suppose you kept going. Their local council is going to proxy their attempts to change venue to where they are located. Unless you had a really compelling argument, they would probably win the change of venue. Now you need to find another lawyer somewhere else, and it is probably an expensive locale like New York or LA where they have a firm on retainer. Still want to push the case? Me neither.

By all means, try the small claims route. But don't think for one second that it is a slam dunk.

That is an incredibly pro-corporate anti-individual jurisdiction. Where is this?

I didn't think my state was that unique, so I did a bit of searching and found some interesting gotchas in a few different states:

Alabama: Must file in municipality where the other party (defendant) resides

Alaska: Easy to move to regular court

Arizona: Easy to move to regular court

Delaware: Cannot be used for punitive damages (basically this)

Indiana: Easy to move to regular court (If I am reading it right)

Michigan: Easy to move to regular court

New York: Must file in municipality where the other party (defendant) resides

Oregon: Basically must file in municipality where the other party (defendant) resides. Easy to move to regular court

You would have to do that if the case were actually litigated. The cost to Equifax to defend the case would be, at the very least, several hundred dollars, thousands, more likely.

I saw your post about this in the other thread. If anyone wants to work together on this idea, my contact info is in my profile. If someone has a lawyer we can loop in (or is a lawyer), that would be ideal.

I am in the state of Kansas and will be filling out a small claims petition as well.


Why $1,000? And how would you prove damages equaling that amount?

$15/month for identify protection/tracking X 12 X 40 years.

You can't even dispute $15/month, since that's how much Equifax charges for their identity protection, so that must be how much it's worth since they caused these damages.

That makes it more like $7200 in damages, not including the cost of money over time, inflation, etc.

For anyone reading this: I believe it’s a one time $10 per credit bureau to freeze your credit. Equifax would obviously like to charge you more if you’re willing. Do not sign up for Equifax’s service. It is a rip-off for a number of reasons.

That exceeds the $$ limit for claims is many states.

I'm sure equifax would respond by offering you free credit monitoring for life (which costs them nothing to do)

Who said the hypothetical plaintiff was interested in _Equifax's_ credit monitoring services? They've already demonstrated they can't keep data safe.

future payments are usually discounted rather than inflated (IE money you have to pay now is more of a burden than money you have to pay in the future)

You could prove how much it will cost to buy service that will protect your identity for a period of time.

> that will protect your identity for a period of time

For the rest of your life

If they are out of business, they sell their assets which are office chairs, fax machines, and a giant database with information on everybody. Are you not worried about the sale of that data?

Their business revolves around selling access to that database. So no, not worried about them selling data that they already sell. Very annoyed that they exist to collect & sell the data, of course.

Isn't the potential impact from selling access to the data versus selling the data different?

In a situation like this, if they get bankrupted, the company continues to operate. The ownership is just transferred to the creditors.

i think that cat's already out of the bag..?

Toyotas negligent practices with regard to software killed at least 2 people. Their developers did not even have a bug tracking system at all. They followed only 6 of 90+ industry standard recommended practices. They lied about the system using error-checking RAM when it actually did not. None of that was enough to get a court to declare them negligent. Equifax will be fully acquitted. If a computer is involved, companies can get away with literally killing people. This is court precedent.

Could we create a service that automates most of the work required to sue in SCC?

Am an attorney.

You could create a system that'd help you file SCC complaints quickly, but to have it detailed enough to pass the defendant lawyer's complaints about the deficiencies in your documents would be difficult.

The size of that problem, however, decreases with the narrowness of the subject matter you want to cover/make claims about. If it were a 'Sue Equifax For The 2017 Data Breach' service, then it might work (the whole point about class actions being that they're similar - commonality, typicality etc - enough)

It's small claims we're talking about, the defendant will not have a lawyer, right?

If you sue a corporation, who do you expect to defend it? It will be an attorney.

I don't know about other states, but in California if you sue a corporation in small claims court, they can NOT send an attorney:

Corporation or other legal entity — A corporation or other legal entity (that is not a natural person) can be represented by a regular employee, an officer, or a director; a partnership can be represented by a partner or regular employee of the partnership. The representative may not be an attorney or person whose only job is to represent the party in small claims court. An attorney may appear to represent a law firms as long as that attorney is a general partner of the law firm or is an officer of the corporation. However, in both instances, all the other members of the partnership and all the other officers of the corporations have to be attorneys as well.[1]

[1] http://www.dca.ca.gov/publications/small_claims/basic_info.s...

Apparently this is not uncommon even in normal court.

I sat on a jury in TX where a couple was suing an insurance company, and the insurance company wasn't represented by an attorney. It was really strange, because the first thing the gentleman does is stand up and spend 5 minutes explaining how he isn't an attorney but he regularly represents the insurance company for smaller claims (it was something like $20k IIRC). Then for the remainder of the next hour and a half or so he stumbled around with arguments against the couples slick lawyer. I guess the guy probably lost most of his cases (?) but its worth it to the insurance company to spend a few hundred bucks getting this guy to show up unprepared for an hour or two in the odd chance he could save them $20k every few dozen cases.

So they find someone to send who isn't a lawyer but has a lot of experience in that area of law and is coached by a lawyer.

I think the point of doing this in SCC is that the cost of defending against small-claims is usually greater than the cost of just settling the SCC. Lawyers aren't cheap, and folks going to SCC are banking on them being more expensive than their claim.

Perhaps it would be an officer of the corporation, named in one of the documents on file with the state's Secretary of State or department governing business records. If only the CEO is named, that is the person who has to appear.

I think states usually allow a regular employee of the corporation to appear, though.

Obviously, the small claims court procedures may vary according to jurisdiction, so you'll have to at least check your state's website before running down to the clerk with filings in hand.

Actually, at least where I live the law is that it can not be an attorney.

It must be a regular staff member or manager.

I did not check how many states have a law like that.

Who do you think is going to represent the company?

yes in this case with the amount of people affected the idea would be to do a one-off website 'Sue Equifax For The 2017 Data Breach' each person would pay a fee $ and get a package they could use in their state to file the SCC complaint. Would this be possible? I think there's plenty of people willing to pay $100 in order to sue for $1,000 if it is even possible

If you already have to enter your name/ssn/dob/address 3x for the credit freezes a 4th time to generate the paperwork for a small claims case isn't much extra work

flightright and the likes come to mind

I'd pay $20 for a service that can walk me through what to do/say, templates legal forms, etc. I would absolutely take the time to sue Equifax in small claims court.

California has a convenient free web page that tells you most of the steps: http://www.courts.ca.gov/1007.htm

This has all the forms and a link to what to do with them: http://www.courts.ca.gov/9744.htm

I would pay 20% of every penny that I win in the lawsuit

same here, heck I'd pay $99

I will also crowdfund taking down EQ.

Give me a service and I'm ready to pay.

Why not? Wouldn't it be the same as the kid that automated fighting a speeding ticket or traffic infraction ticket?

Traffic tickets aren't generally resolved in SCC. Traffic tickets are very specific. As the actual attorney pointed out, if you make a generic "file a SCC claim here" app its resultant documents will be pretty quickly discarded as insufficient.

SCC is not hard, it's cheap, and it's designed to be easy to do and not require legal assistance to do so.

They should be driven out of business. Their #1 commodity, the only reason they exist and they don't spend the time or money to protect it?

I said it elsewhere, but I think the right response is to opt out of the class, and sue for $1000 in small claims court.

There's usually no enforcement of penalties in small claims court.

Submit it to debt collectors and put it on Equifax's credit report

And because their security will probably still be a joke after this is all over, someone can hack their database again to ensure they actually put the claim in there.

This. So much this.

send in the bailiffs to confisticate goods ideally the c level execs Porsche

I don't know how many times you have been to Small Claims Courts but there are multiple ways to enforce penalties in Small Claims; a judgment from a judge, a till-tap, levy their wages, place a levy on their bank account, placing a sheriff in their area of business (for a fee) and will stay there until he's collected all the funds, submit to a collections agency etc.

Don't speak on something if you don't know what you're talking about.

If an average person can get a giant mega-corporation to pay up through small claims then there is hope for all of us :)

the only difference is a giant corp can simply say "hey sorry we didn't pay earlier" when if a consumer tried to do that we would have more penalties placed upon us.

levy their wages

Whose wages? If you win against Equifax, Equifax isn't getting a wage. Equifax is paying wages, but you didn't win a suit against its employees. You won against the corporation.

place a levy on their bank account

Seems like your best bet. However, this might be complicated, depending on how they've distributed their assets. Quick, can you tell me the name of the bank, the account number and the exact name on the account?

placing a sheriff in their area of business

Seems to me that Equifax might just keep draining your account through continued fees.

submit to a collections agency

I suspect this might be satisfying in its symbolism, but not necessarily effective against Equifax.

Don't speak on something if you don't know what you're talking about.

Seems like good advice.

> There's usually no enforcement of penalties in small claims court.

perpetuating this mindset that the average consumer is too weak to do anything to these corporations and individuals who hurt them through the court system is nonsense and needs to be avoided. From the article posted below (where my other comment is):

"Allen then reported to a local branch of the bank with sheriff’s deputies, who he instructed to remove cash from the tellers’ drawers, furniture, computers and other property. Approximately one hour later, the Naples News reports, the bank manager produced a check for $5,772.88 to satisfy Allen’s fees and additional costs."

You have a lot more power than you think against corporations and people through our court systems. even small claims courts.

Then what's the point of it?

The ideal way to recompensate $500 or $1000 dollars is to sign up everyone for credit/id theft protection, for say, 5 years.

I don't know where else they get their revenue from, but free credit protection will hurt them significantly in the long run.

I've heard that those credit monitoring plans are a joke, and provide very little value besides the simulation of "doing something."

They just tell you after the fact that a new credit line has been established. It's still on you as the consumer to go prove that it wasn't you and that you didn't open it...

And guess what, the same questions that they ask you to prove you are who you say you are, are the ones that have likely been stolen!

Lifelock themselves were subject of a data breach in 2015.

Can I actually do this? Cause if I can I'm totally doing this.

IANAL, but I think you'd find it virtually impossible to show $1000 of direct, material damages as a result of having your information leaked[0] and to the best of my knowledge this is the only sort of claim that small claims courts allow - I believe they do not allow punitive damages, nor theoretical ones.

0: Unless your info is actually used in a way that harms you, and you can prove that it was a result of this, but that seems unlikely to be true for the majority of affected people.

Is it really so hard? Cost of a service like Equifax's own TrustedID or LifeLocks is over $100/year. Seems you could easily argue that you'd have to subscribe to said service for the next decade to guarantee your credit and identity aren't stolen?

(and I would think refusing to accept Equifax's "coupon" for TrustedID would be a similarly easy argument to make)

> to guarantee your credit and identity aren't stolen?

there's no right to not having your identity not stolen tho. By this logic, shouldn't you _always_ have the identity-theft prevention service paid for already, regardless of what happened to equifax?

I think you'd have to show _actual_ identity theft occurring with your name to claim damages.

No, now you need to sign up for identity-theft protection because Equifax handed all your info to the bad guys.

If it weren't for Equifax, anyone trying to use your identity would have a much harder time.

Many time the thiefs are actually caugh. If he she admits to stealing your data in this leak AND you are damaged, then here is your proof.

I think it's unlikely you'll actually be damaged. Any real financial impact would have been reversed by your bank. Maybe a fee or two that two parties argue about who should reimburse your for it, however I can't see stuff like that adding up to $1,000 (or even $100).

You misunderstood how this affects SS #s holders. Its way more serious than just opening up a credit card and disputing it later on. In such situation the bank will reimburse you and close down fake account, but many banks will put negative information on your account just to warn other banks. You have to look at it from bank perspective, not your own. The bank can report: "okay we don't know how and when but someone opened account in client's name on his behalf so this clients has problems with his identity being stolen. Be warned".

Edit: not to mention the worse damage will be from fraudsters taking loans.

Does this "be warned" flag on someone actually damage them in any way?

Well about 2 months ago (when the leak was happening apparently) I had false information showing up on my credit report for a Comcast debt.

The weird thing is the Comcast debt couldn't have actually been mine. As the date of the debt was smack dab in the middle of when I had service with Comcast before switching to ATT.

Now, during this period I tried to refinance my home and was denied due to a low score with Equifax. I pulled my EQ 2 weeks before trying to qualify and there was nothing. Then I found that after I was denied and pulled it again of course. I submitted a challenge on it, and it was removed within 2 weeks but the damage was already done.

So would this count as real damages?

You need to show a dollar amount that it cost you. If you can do that, you also need to show that had the leak never happened, you never would have had the issue in the first place.

Whether the debt "could have been yours" isn't relevant, what's relevant is how it showed up there. If someone fraudulently signed up for a Comcast account using your social, and they obtained your social via the leak, then yes the leak damaged you. You could go after the difference in your refinanced interest rate now v. what it would have been had you gotten it at the first request (are you paying 0.1% more because rates went up a week after your denial?) and possible the additional interest paid between the denial and the successful refinancing.

But if the Comcast account showed up on your report because someone fat fingered a social and there was no fraud, the leak didn't damage you at all and it was just bad luck.

If you can write up the process in detail for my state, I will give you 15% of what I win from them. If you automate it as much as possible, 20%.

They still have the death penalty for humans in the US, why not companies?

They do, it's called corporate dissolution. Not sure what precedent there is for a class action suit that results in dissolution, but it would be a pretty good precedent to set IMO.

Does anyone have experience with this process and could share some tips, e.g. is it likely to be successful, is it open to non-citizens, how much paperwork are we talking about?

How hard is it to sue in small claims court?

I love your idea. I would be game if something is happening in that direction.

In small claims court, would you not have to show $1000 worth of damages?

Yes, and it's possible using simply arithmetic and market rates! Given that freezing your credit ratings is a necessary precaution after this damage inflicted by their negligently unpartitioned database, we can calculate:

1 legally guaranteed free credit report / year * ($5 freeze before + $5 unfreeze after) * 3 agencies * 33 more years of healthy remaining life God willing = $990 right there.

Move apartments or change jobs just once in that interval, and it will bring you up to a round thousand. Bam.

Actual, not theoretical.


Are you kidding? This is a 100% instant dismissal if it even gets to a judge. The allegations are groundless...the plaintiffs have no knowledge of Equifax's security systems in order to have any sort of standing to make any claims regarding the quality of it.

The sad truth is you can do everything right to the best of your ability and still get hacked. So just the fact that they were hacked isn't sufficient evidence that they were negligent.

NYS Attorney General on the arbitration/rights waiver clause: "This language is unacceptable and unenforceable. My staff has already contacted @Equifax to demand that they remove it." https://twitter.com/AGSchneiderman/status/906195350532304896

Also: "I am launching a formal investigation into the #Equifax breach. Today, I sent a letter to @Equifax seeking additional information." https://twitter.com/AGSchneiderman/status/906197644841766912

Yeah, I'm not sure the arbitration language is applicable here anyway. The claims would arise from Experian's failure to secure their data, not from use of the "Products" offered by TrustedID (namely, the website allowing me to check) or the subject matter of the Terms of Use agreement.

Their FAQ [1] now appears to explicitly say so: that the class-action waiver and arbitration agreement only apply to disputes over the credit-monitoring product itself, not over the original breach. I don't know if they have some way to still weasel out of that, but publishing that clarification on their website seems like it'd make it harder?

Do the TrustedID Terms of Use limit my options related to the cyber security incident?

The arbitration clause and class action wavier included in the TrustedID Premier Terms of Use applies to the free credit file monitoring and identity theft protection products, and not the cybersecurity incident.

[1] https://www.equifaxsecurity2017.com/frequently-asked-questio...

Ok, so credit reporting agency collects sensitive personal and financial data on basically every adult American, loses it to a bunch of criminals and now I have to deal with the consequences?

I looked into credit freezes yesterday. This is really a total scam. You have to _call_ each of the three agencies and pay a fee ($5 to $10) each time. If you need to unfreeze your report to make a legitimate credit application you have to call each of them twice (once to unfreeze and another to freeze) paying fees every time.

Now if you're a paying member (paying a minimum of $15/month to each agency) you can just lock and unlock your credit file on a mobile app (well, three mobile apps and I'm not sure all three support this). It's amazing how convenient things get once they're already extorting you for "credit protection".

This shouldn't even be legal.

Also, if a fraudster defrauds a financial institution with your personally identifiable details, it should be an issue between the agency and the financial institution as you were not a party to this loan. The reporting agency saying you were should be slander.

Financial institutions should be interested in consumers having an easy ability to lock their credit files as it would decrease the number of fraudulent credit applications.

So why can't I have a mobile app (or three) for free that allows me to easily lock and unlock my file or, better yet, to vet every inquiry and approve it or not?

Corporate charters can be dissolved by the government at any time. Given Equifax ONLY deals in building detailed profiles of every US adult and managed to lose that information to criminals is grounds for terminating their corporation.

At this point, their lack of basic security practices has endangered national security by weakening the banking and credit systems.

On top of that, this company is massively unpopular. Their only purpose is to potentially slander Americans en masse. Make a fucking example out of them so the rest of the finance industry takes notice.

The government can't just dissolve a corporation on a whim. We have due process and the rule of law.

> The government can't just dissolve a corporation on a whim.

Not on a whim, but for (e.g., in Delaware) “abuse, misuse or nonuse of its corporate powers, privileges or franchises.” (Delaware Code Title 8, § 284.)

> We have due process and the rule of law.

While rarely used in practice currently (it was more used in the past, and there is a movement to revive the practice), the law provides for charter revocation for corporate misconduct.

The point is that charter revocation requires both the executive and judicial branch to agree. Moreover, I think I can guarantee that any vague sounding statement like "abuse, misuse or nonuse of its corporate powers, privileges or franchises." has been translated into a series of relatively specific conditions by the courts. You can't just sue someone for being vaguely terrible.

Basically, however appalling the unaccountable power of credit bureaus is, it was legal yesterday and it's not the job of either the executive branch or the judicial to decide today that such power isn't legal today. The judicial system especially is oriented towards prevent that kind of thing. Rather, deciding that is the job of (even more dysfunctional) legislative branch.

This, of course, doesn't guarantee that executive or judicial branch couldn't "get religion" and try to get end this situation but it would have it own messiness.

And there you have it - an American legal/government system very much resembling a well built car driven far too long without an overhaul.

It doesn't seem like the executive and judicial branches will need to get involved whatsoever if there is a multibillion dollar lawsuit; if successful this will basically 'dissolve' Equifax.

Well, I wouldn't shed any tears over the dissolution of Equifax and other credit agencies - though a lawsuit would of course involve the judicial branch (the courts).

But the problem is:

A. If Equifax gets a judgment for close to or for more than the company is worth, the simplest way one could assure the suit is paid to sell the company, keeping the operation going rather than ending it.

B. Many businesses integrate credit checks into their operations - it's ridiculous and despicable as mentioned by other but most of these companies and individuals (landlord for example) at least imagine they couldn't survive without the credit agencies so this large group would push for another solution then just getting rid of the credit agencies.

C. Getting rid of one credit agencies leaves the other two even stronger.

If there were a $17 billion judgement against a $17 billion company, it would not sell for $17 billion.

It is also unlikely a $17 billion market cap = $17 billion in assets during an emergency sale. Especially with the shadow of a $17 billion judgement that could encumber the acquired assets.

It's bad business to acquire assets from someone with a judgement against them, unless you're getting a great deal.

If there were a $17 billion judgement against a $17 billion company, it would not sell for $17 billion.

If there is a judgment against a company which that company cannot pay, that company enters bankruptcy.

What happens when a corporation enter bankruptcy is the assets of the corporation are assigned to a receiver. The receiver then disposes of those assets with the aim of raising as much money as possible to pay the creditors involved. In the case of a credit bureau, keeping the bureau functioning would arguably be the best way to earn money to pay the individuals who the corporation owes money to - both the people who the got the judgment (first priority), other creditors(second priority) and then the share-holder (third priority).

This situation means that corporation that produces toxic waste, dumps it in a river and goes bankrupt from a private suit against it could continue to produce toxic in order keep producing and making money, in order to pay that judgment (it would probably be argued that the toxic-waste leak was a one-time thing).

Part of the problem is a private lawsuit isn't a substitute for state regulation even if it's often presented as such. Part of the problem is the very worst that happen to the owners, the shareholder, is their shares become worthless so their incentive for stopping truly bad behavior by organizations is limited.

You might say this is fucked-up and I would agree with you. Don't confuse my comments with statements of support for how things. I simply want to thorough, accurate and complete summary of just what a messy we're in.

Bankruptcy is the strange other side of the US debt system. In this case, it would be an unfair get out of jail free card, a shirking of responsibility.

"Well, I wouldn't shed any tears over the dissolution of Equifax and other credit agencies"

In Project Mayhem we have no names.

> they couldn't survive without the credit agencies

Europe operates just fine without the notion of credit or credit agencies.

If there is a lawsuit, the judicial branch is involved.

This assumes the highest good is to maintain the previously defined delineation of governmental branches.

Some of the legislative branch dysfunction is due to interference from the same corporate interests they should govern.

Corporations are able to DoS their oversight.

You are correct there will be unexpected messiness. The question becomes whether our current trend is sustainable over the long term; many believe the second order effects cannot be worse than the path we are currently on.

What I can't believe is why there's not a criminal case against these idiots? When you are controlling something dangerous and you allow that thing to harm someone else, it's a criminal offense. It's not a matter of whether it's hard. It's simply your responsibility to ensure no one gets hurt. This company has already caused harm to literally everyone in the US. Minimally, we all now have to take action to attempt to avoid identity theft. And it only gets worse from here. And these bastards have the chutzpah to wait until hurricane Irma is upon us to make the announcement.

Bourgeois law in its wisdom protects individual property owners from their mistakes, unless they affect owners of larger property... that said, Equifax may have just fucked over the entire retail/consumer credit industry in the US, so the hammer may very well fall on them. We might get some of those banker perp-walks everyone loves.

But with the current administration as well as Congress (we're likely to see a Federal gov't shutdown over the budget even though the Republicans control the legislature and White House), I wouldn't anticipate seeing any regulation down the pike because of this.

They mention the Struts vuln, but not which one... did an attacker access the info directly via a naive attack, or was this a campaign? Having worked on Enterprise-Ready(tm) systems I wouldn't be surprised if Equifax had an unsegmented network...

If people did not go to jail for the wells fargo fiasco where willful fraud was committed, I very much doubt anyone will go to jail for this. Although you are absolutely right, someone should be severely punished for this.

> This company has already caused harm to literally everyone in the US.

Not yet. People might be annoyed but not many of them have been harmed yet. They're harmed when their identity is actually stolen (i.e. used by someone else), not merely when someone gets access to their data.

(Not saying I like this system. Just saying this it how the system works.)

Since Congress defines what the law is, couldn't they do it? The only law binding Congress's lawmaking powers is the Constitution, and I don't think it restricts their ability to dissolve corporations.

It does actually have such a restriction (Article 1 Section 9): "No bill of attainder or ex post facto Law shall be passed." Further, it prohibits the states from passing such laws as well (Article 1 Section 10).

If Equifax gets sued into bankruptcy and the government passes a law for next time this happens I'd be okay with that outcome.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

So this would only work if you can find a clause permitting them to do this. I assume this would be the commerce clause?

In addition to what others have said, you cannot be deprived of life, liberty, or property without due process in the US.

In principle that's true...

In reality 1. You can be shot by a cop even if you do not pose a real threat (they just need to claim they though you might have a gun, simple) 2. People are routinely kept in jail for unreasonably long time because their families cannot afford bail often on things charges are dropped for later 3. Ever hear of civil forfeiture?

The whole thing is a nice story that we love to repeat to each other. Maybe it was easier to accept that during the cold war when the other guys were worse and news traveled slowly (or didn't). It's pretty apparently that isn't true given the quick news cycle... and opening any US history book.

Sometimes I wish I could myself become a corporation. Seams it's much easier to exercise your rights as a corporation.

>Ever hear of civil forfeiture?

Yes, a process in which the government has to prove to the same standard of evidence as someone suing you. That is due process.

The difference being that the government confiscates the property while the case makes its way through court.

In practice this is a huge difference.

> Yes, a process in which the government has to prove to the same standard of evidence as someone suing you.

That's not quite true. They don't make a claim against _you_. They make a claim against the property.

So, it's the same level of evidence and adversarial hearings as someone suing $1,000. This is not due process. It's a farce.

They have to convince a jury that the property in question is the proceeds of a crime.

That's not true in all cases, which is one of the problems people have with civil asset forfeiture.

That is civil asset forfeiture.

Not all states guarantee a jury trial for civil asset forfeiture.

And federal civil asset forfeiture almost always starts out as administrative forfeiture which doesn't involve the judiciary at all.

When the feds seize an asset the owner has 60 days to file a claim. If no claim is filed the government keeps the asset.

If a claim is filed, the government can either pursue civil or criminal forfeiture. In the case of civil forfeiture there is a right to a trial by jury.

However, as I said previously this isn't automatic. The person has to either have the legal knowledge to know how to file a claim, or they need a lawyer. In the majority of cases no claim is filed in many cases because the legal fees necessary to recover the asset will be greater than the value of the asset.

Basically if the government sizes a few grand in cash, it will cost you too much to recover it to make it worth it.

In states like Tennessee, police can seize your cash and you have to sue to get it back. They automatically get to keep the assets unless you sue them. They don't need to convince a jury of anything unless you sue them.

This is not the same thing as a person suing you and then using a replevin action to force you to give up your property. This is like if a person broke into your house, took your TV, and then you were forced to initiate a lawsuit to get it back. Plus you couldn't recover legal fees, it was significantly more complicated and costly than small claims court, and the thief suffered no consequences beyond returning the TV even if they lost the case.

Even Clarence Thomas, the most conservative member of the the Supreme Court, indicated in recent statement that he believes the current way civil asset forfeiture is practiced is unconstitutional.

Due process has been somewhat lacking in practice. https://www.nytimes.com/2017/07/19/us/politics/justice-depar...

I'm sure that comes as great comfort to all the people in the US to whom that's happened.

Confused. Some sources are reporting this was a zero-day vulnerability only recently discovered.

I'm as emotionally upset as anyone else, but if in fact this was a zero-day, I also lose the basic lack of security practices argument.


Even with an 0-day, why was consumer data not encrypted at rest with segmentation for access?

If you have the most sensitive information for millions of people, maybe don't only worry about perimeter defense?

True. A flaw in the perimeter doesn't forgive poor data management practices.

Given the number of FS sites running on IBM Websphere and Struts, this may only be the tip of iceberg.

FS == Financial Service???

>Ok, so credit reporting agency collects sensitive personal and financial data on basically every adult American, loses it to a bunch of criminals and now I have to deal with the consequences?

This is what pisses me off - I never gave them authorization to collect information on me. I have no business relationship with these companies. To me they look a lot like parasites even when they're not giving away my data.

EU privacy and right-to-access laws aren't looking so bad now are they

You often agree to this when applying for a loan or credit card.

agreeing under coercion shouldn't be considered agreement.

yes, I realize that the definition of "coercion" here is complicated and nuanced, but I feel the point stands.

You don't have to unfreeze the reports to open a new credit application - the credit app gets rejected (on hold), and the credit issuer will ask you for an auth code. You go to the appropriate agency, log in with the credentials you used when you set up the freeze, provide the request code, they respond with an auth code, you relay the auth code to the credit issuer, credit app progresess.

It basically just forces an auth flow for a credit application, which is quite sane. You can also do the whole process - enrollment and manual authorization - online. It was quite painless for me to do it a couple of years back.

That hasn't been my experience applying for credit with frozen reports. I have to unfreeze them (paying the fee), call the creditor to reattempt to pull the report, then refreeze.

>So why can't I have a mobile app (or three) for free

Yes, and I think it's a bigger question of why we have so little control over or access to our own data in the first place? It's a racket that they monetize our data by selling it to others, then charge us again to access and protect it. And, if you've ever had to go through the pain of having something corrected in a timely fashion, then you know it's doubly-maddening. They are purposely opaque and byzantine.

Yet, without our data, they'd have no business.

>Yet, without our data, they'd have no business

Yet, without credit rating agencies, you'd get no loans.

This kind of thinking is what allows these companies to get away with this kind of incompetence. Loans were given before credit rating agencies existed. This incident shows how flawed our current system is.

> Yet, without credit rating agencies, you'd get no loans.

Loans existed for millenia before credit rating agencies, so that seems unlikely. It's more likely that the people getting the best loans terms today would pay a higher cost for borrowing without credit rating agencies, and that credit references would be more important, though.

There is no such agencies in lots of countries (e.g. France) and still people get loans. When I came to US, I had to purposely take extra credits/loans to boost my inexistent credit history. Now I am credit worthy thanks to my artificial debt.

I'm not arguing against you, just curious... in France, what prevents people from just applying for loans over and over and never paying them back?

There are other means to determine whether someone is eligible for a loan (wages, collateral, family support...).

Not true. But, even if it were, there's no requirement that they operate as they do.

hmm i called the 3 mentioned here today and all were free.


    Equifax — 1-800-349-9960
    Experian — 1‑888‑397‑3742
    TransUnion — 1-888-909-8872

I believe it depends on your state. I'm in California and I had to pay $10 for freezing on Experian and TransUnion, although it was free for Equifax.

Same experience here (also CA), and I was able to freeze all of them online.

It's mildly interesting how different the experience was across the three. Experian gave me the choice between choosing a PIN and getting a generated one, Equifax just gave me a PIN, and for TransUnion I had to choose the PIN (shorter than for the other reports) myself.

How do you freeze them online?

Come on, that's really not hard to find out for yourself. But here are the links anyway:

https://www.freeze.equifax.com/ https://freeze.transunion.com/ https://www.experian.com/freeze/center.html

ugh. even their 10 digit code they provide to unfreeze someone isn't very secure. It's simply todays date plus a 4 digit pin that moves up in the order that someone signs up. For example: 090817xxx1, 090817xxx2. So my wife and I are simply two numbers apart.

Jesus. I think you can provide your own. But yeah, when the user-facing bits are this bad, you know it's nothing but garbage below. I can't believe these companies have so much power.

It worse. It's not even a 4 digit PIN. It's the time in 24-hour format HHMM: https://news.ycombinator.com/item?id=15205579

You and your wife just did it 1 minute apart...

I can't even imagine how something like that can be implemented. Even if you put the most junior developer on this, something so serious should have been reviewed by someone. At least do a quick search on stack overflow or something.

i filled out the experian form online for free:


That's not a credit "freeze". It's just an alert system.

All the confusion in this thread is disturbing. If HN readers can't figure this out, the general public is totally screwed.

https://www.consumer.ftc.gov/articles/0497-credit-freeze-faq... said:

"You'll need to supply your name, address, date of birth, Social Security number and other personal information. Fees vary based on where you live, but commonly range from $5 to $10."

So depending on where you live, you probably have to pay.

Fuck that, Equifax should offer free freezing for anyone affected by their breach. Charging for it is profiting from their own negligence.

Would love to hear a lawyer's take on this.

We all got two comments into this thread and decided literally anything is better than trying to deal with all the crazy legal theories and bullst going on in here.

I've just been skimming search result for lawyer... You're pretty much the only one actually asking for one...

So wait, you only need to provide the very same data that was just breached? So anyone can just freeze anyone else's credit now?

Edit: well, you have to pay with a credit card so it's traceable, so not that bad.

Well depending if you have the answer to the 4-5 security questions , like previous address ,car loan payment amount, or mortgage , stuff that you would only know. I don't know the full scope of the compromise, but someone wanting to use your info would not benefit from freezing it. If you forget your pin I'm expecting them to send it to the mailing address

Even if an attacker doesn't benefit, it's still possible for them to mount a denial-of-service attack. That could be very damaging. Or, they could use the threat of a DoS attack for extortion purposes.

I'm sure paying with a stolen credit card is no problem for somebody willing to steal your identity in the first place...

I thought all 3 were free to freeze but $10 to unfreeze

$10.83 in Texas for Experian

f no I'm not paying them anything

What state do you live in? Credit freeze rules vary from state to state.

I'm wholly ignorant to this but I am very curious. Why would it be like that?

Different state laws mandating different things.

Federal Law allows a fee, some states have passed laws mandating no fee, or no fee to freeze but a fee to unfreeze, etc

Is there a wiki page or government list that describes the rules for each state?

Experian has not accepted phone applications for a security freeze for a while now.

> So why can't I have a mobile app (or three) for free that allows me to easily lock and unlock my file or, better yet, to vet every inquiry and approve it or not?

Indeed. This is now no longer something that would be nice to have; it's the only way the system can possibly work. If a credit agency can no longer verify your identity by asking you questions about your history -- the criminals now have all that information -- there's going to have to be another way.

Sounds like a great YC application! Someone should do it!

PBS also reported that if you sign up for this, you give up your right to go after them if something happens - there's some kind of agreement that you have to go thru some process I forget the name of, in which the company usually wins.

Also, although they offer 1 free year, the problem here (social insurance number, etc) is a lot longer than that, so you'd be paying a recurring amount, wouldn't you?

Specifically indicated on their site:

>2). NO WAIVER OF RIGHTS FOR THIS CYBER SECURITY INCIDENT In response to consumer inquiries, we have made it clear that the arbitration clause and class action waiver included in the Equifax and TrustedID Premier terms of use does not apply to this cybersecurity incident.

Except that isn't binding like the agreement it is contained within.

which state you are in?

Just chiming in to say that I was able to freeze all three online yesterday. No calls needed!

How'd you do this without calls? Did it cost?

I used the handy links here:


Of course, Equifax just gave me a 500 AND charged my card anyway, so that was nice. The other two worked fine though. Equifax is a steaming pile of garbage.

Edit to mention that I only used burner cards for the payments.

I posted this on another less popular thread about the topic; Equifax stock was down about 14% overnight from yesterday to this morning but held pretty steady today...

"This is not financial advise:

I remember a few commentors on HN recently saying they have made large gains by buying stock of companies after the news of cyber security breaches significantly reduced the share value, then waiting for the dust to settle(reaction-news-cycle to complete) and price to return to similar value after a few months."

Hopefully this time will be different, but I doubt it.

It depends on how well the proposed multi-billion dollar lawsuit goes. It's reasonable that the stock price would include a risk premium.

For NC residents, it's free to freeze your credit files:


I was able to freeze my credit through on-line forms using instructions here:


Fees vary by state. I think I paid ~$20 total and not all of them charged me.

Oof. I really don't want to give these incompetent losers my credit card number.

They already have your credit card numbers. Banks report the numbers to them.

I'm amazed these events don't seem to shake the american love for credit cards. Like now you've seen what happens in the extra layers between you and the money, I wish people would go back on the poison pill and maybe switch to debit cards.

Credit cards are great because if someone steals mine and makes fraudulent charges, they're stealing Chase's money, not mine.

(In theory if someone steals money through your debit card you can get it back... in theory. I'd like to avoid ever having to find out how well this works in practice).

For which priviledge Chase charges you something obscene. The process post-theft on a debit card is not as scary as you seem to think it is, but that may be a EU vs US rather than credit vs debit thing.

Chase isn't charging me anything for the privilege. I have two credit cards with them -- one with a $0 fee and the other with a $450 yearly fee (but on which I earn way more than $450 in rewards points a year so it washes out).

They charge interest, but you don't pay any interest if you settle the full balance every month, which I always do.

I'm sure the maths work out at an individual level, but have you considered the effect on pricing being a debit-first society would have?

Most merchants/payment processors include a premium for handling the edge cases that arise from credit-linked misbehaviour. In the same way you sometimes get a cash discount, removing the merchant/provider protections should show up in your wallet as a good (and surprisingly high) surprise.

As I understand it (please correct me), the party who gains for the furtherance of this agenda is the financial service sector who has another opportunity to insert marginal fees and more importantly, a direct access to your transactions without necessarily having the same fiduciary duty or alignement of goals than a bank teller/account manager would have.

Seconded. _Really_ do not want to give them my money, as it they've earned it. This is their screw up.

Credit card number is the last thing you should be worried about.

I use privacy.com for things like this.

Does it affect your credit rating to freeze and unfreeze your credit? I wouldn't be surprised if it does. It's insane to me that looking up your credit rating negatively affects it. WTF is that about?

Freezing/unfreezing does nothing to your credit score. Also, looking up your credit score and pulling a report for personal reasons (read: not a credit line application) will NEVER affect your score. It's what they call a soft credit inquiry, which is not shown on your report when creditors pull it, and won't factor in to credit score calculations. https://www.creditkarma.com/article/hard_inquiries_and_soft_...

It does not affect your credit rating for freezes and unfreezes. And it's a good thing that hard pulls on your credit affect your score, because it's a stop gap for excessively requesting credit. It can also prevent heavy fraud because creditors will often reject potential customers with too many hard pulls.

This is how I feel. https://equifaxbreach2017.com

FYI. That is a satire / parody site and not the real one.

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