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With 143 million people potentially hit by Equifax Inc.'s data breach, there's no doubt there will lawsuits — a lot of them.
“You'll have suits in every state,” says Ben Meiselas, an attorney at Los Angeles-based Geragos & Geragos, which filed the first case in Oregon along with Michael Fuller of Olsen Daines in Portland, OR. Geragos & Geragos planned to file lawsuits in at least a dozen states within the next week, according to Meiselas. “The full scope and magnitude is still being gathered, but it's obviously one of the largest data breaches ever and affects almost half the population of the United States. That's going to mean hundreds of lawsuits.”
Another class action was filed in Georgia, where Equifax is headquartered. On September 8, New York Attorney General Eric Schneiderman launched a formal investigation into the breach. There's also a good chance that all the Equifax lawsuits will get coordinated into multidistrict litigation.
A major theme in the suits will be how Atlanta-based Equifax, whose entire business as a credit reporting agency is to maintain personal and confidential data on individuals, wasn't prepared for hackers who have hit retailers and health care companies for that same information.
“The product this company trades in is the type of data that thieves want,” says Brian Gudmundson, a partner at Zimmerman Reed in Minneapolis who has served in lead counsel roles in litigation over data breaches at Arby's, Wendy's, Target and Home Depot. “They would certainly have to be under the highest level of security that there could possibly be and yet they seem to be a subject of a breach for a period of time that lasted almost two months and didn't disclose it until a month and a half after they heard of it to the tune of 143 million — half the population of the United States. That's a red flag. That's a huge red flag.”
It's a point that wasn't even lost on Equifax.
“This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do. I apologize to consumers and our business customers for the concern and frustration this causes,” Equifax CEO Richard Smith said in a statement on September 7. “We pride ourselves on being a leader in managing and protecting data, and we are conducting a thorough review of our overall security operations.”
The company's own actions have done little to calm the fears of consumers. Meiselas says his firm was getting thousands of calls by the hour after the breach became public. He says Equifax's “horrible response” is “a teaching moment of how not to respond when there is a data breach like this.”
Here are five key takeaways about the Equifax actions in the immediate wake of the breach revelation:
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Amanda Bronstad writes for The National Law Journal, an ALM sibling of Cybersecurity Law & Strategy. She can be reached at [email protected]. On Twitter: @abronstadlaw.
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