Equifax Class Action Filed After Data Breach of 143M Consumers

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The credit reporting company, Equifax, has been hit with a class action lawsuit over a recently announced massive data breach affecting 143 million consumers.

Lead plaintiffs, James McGonnigal and Brian Spector, allege in their class action lawsuit that Equifax failed to adequately protect the consumer data it collects, including millions of Social Security numbers, names, email addresses, birthdates, and other personal information lost to cyber thieves.

Further, allege the plaintiffs, Equifax unreasonably delayed announcing the cyber breach, costing consumers precious time to protect their identity from hackers, so Equifax execs could sell off their stock in the company before the announcement.

According to the class action lawsuit, Equifax discovered the breach on July 29, 2017; however, the public was not informed until Sept. 7.

“Instead [of announcing], Equifax executives sold at least $1.8 million worth of shares before the public disclosure of the breach. It has been reported that its Chief Financial Officer John Gamble sold shares worth $946,374, its president of U.S. information solutions, Joseph Loughran, exercised options to dispose of stock worth $584,099, and its president of workforce solutions, Rodolfo Ploder, sold $250,458 of stock on August 2, 2017,” the Equifax class action lawsuit states.

CNN reports that the massive data breach affecting an estimated 143 million occurred between mid-May and July of this year. The breach included a huge breadth of information, including names, Social Security numbers, birth dates, addresses, credit card numbers, and driver’s license numbers, reports CNN. This breach is different from others, says the news agency, because individuals may not even know they are customers of 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,” said CEO Richard Smith said in a statement reported by USA Today. “I apologize to consumers and our business customers for the concern and frustration this causes.”

According to the class action lawsuit, Equifax could have avoided the breach, but failed to take adequate measures to ensure its data systems were protected. Further, say the plaintiffs, the credit reporting company failed to monitor and detect the breach in a timely manner.

“Equifax’s negligent failure to maintain reasonable procedures is supported by, among other things, former employees’ admissions that Equifax’s data security practices have deteriorated in recent years, and Equifax’s numerous other data breaches in the past,” alleges the complaint. “Further, as an enterprise claiming to be an industry leader in data breach prevention, Equifax was well aware of the importance of the measures organizations should take to prevent data breaches, yet failed to take them.”

Equifax has set up a website to help consumers figure out if their information was affected by the data breach. The company says it will provide credit monitoring and identity theft protection for those affected. However, some of the language in the initial agreement fell under scrutiny as it appeared to force consumers to waive their rights to pursue litigation if they accepted the free credit monitoring.

New York Attorney General Eric Schneiderman announced on Twitter Friday that Equifax’s arbitration clause was “unacceptable and unenforceable.” Schneiderman’s office ended up contacting Equifax to demand its removal.

Since then, Equifax appears to have clarified its position on forced arbitration regarding the massive security breach by releasing the following statement on its website: “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.”

The plaintiffs seek to represent a nationwide Class of consumers whose personal information was accessed during the Equifax data breach. The plaintiffs are seeking damages and reimbursement as well as a court order requiring Equifax to implement systems to protect peoples’ personal information in the future.

McGonnigal and Spector are represented by Roy E. Barnes, John R. Bevis, and Cameron Tribble of Barnes Law Group LLC, and John Yanchunis and Marisa Glassman of Morgan & Morgan Complex Litigation Group.

The Equifax Massive Data Breach Class Action Lawsuit is James McGonnigal, et al. v. Equifax Inc., Case No. 1:17-cv-03422-WSD, in the U.S. District Court for the Northern District of Georgia, Atlanta Division.

UPDATE: On Sept. 12, 2017, Equifax announced on Twitter that it will be waiving security freeze fees for the next 30 days. To initiate a credit freeze visit freeze.equifax.com. If you get an error message, you can also request a security freeze by calling Equifax directly at 1-800-685-1111 or by providing the information in writing. More information on how to place a credit freeze can be found here.

UPDATE 2: On July 30, 2018, Equifax Inc. asked a Georgia federal judge to dismiss claims brought by 10 small businesses in a massive data breach class action lawsuit because businesses cannot bring claims based on the alleged injuries of the business owners.

UPDATE 3: July 2019, a website has been established to inform Class Members of their rights under a $700 million Equifax data breach class action settlement.

UPDATE 4: July 2019, the Equifax data breach class action settlement is now open. Click here to file a claim.

UPDATE 5: On Nov. 19, 2019, the class action watchdog Center for Class Action Fairness filed an objection to the Equifax data breach class action settlement, claiming that the attorney fee request should be reduced and that the settling parties suppressed the claims process.

UPDATE 6: On Dec. 20, 2019, a federal judge gave a $425 million Equifax class action settlement final approval despite objections from consumer advocacy groups.