EQUIFAX’S FORMER CEO ADMITS THE COMPANY CONTINUES TO PURSUE “LEGALLY VIABLE” FORCED ARBITRATION

Source: American Association for Justice

Washington, D.C. - October 6, 2017 (The Ponder News) -- Appearing before the Senate Committee on Banking, Housing, and Urban Affairs today, former Equifax Chairman and CEO Richard F. Smith admitted that since it’s a “legally viable path,” the company still pursues forced arbitration. This admission comes just weeks after Equifax abruptly removed the forced arbitration clause, after massive public outcry, that prevented victims of Equifax’s recent date breach from pursuing justice in court. These efforts to strip consumers of their rights could be stopped altogether if the U.S. Senate were to allow the Consumer Financial Protection Bureau’s (CFPB) forced arbitration rule to go into effect.

“The fact that Equifax is still imposing forced arbitration on its customers, even after their data breach fiasco, further proves why we need to uphold the CFPB rule,” said American Association for Justice CEO Linda Lipsen. “Shame on Equifax for trying to push consumers into forced arbitration after enduring the largest data breach in U.S. history, but it shouldn’t be legal for Equifax to try such a move in the first place.”

Last month it was revealed that 143 million consumers (roughly 40% of all Americans) had their personal information stolen in a massive data breach. Once it became public that Equifax was trying to steer these victims into forced arbitration, the company quickly withdrew the arbitration clause and blamed its existence on a technical error. Smith’s admission proves that unless the CFPB rule exists, companies like his will continue to use forced arbitration to deny their customers access to justice, putting the American public at the mercy of financial institutions and Wall Street banks.

“We’ve seen that when consumers lose their rights, companies like Equifax and Wells Fargo are going to take advantage of them,” concluded Lipsen. “When banks and credit reporting agencies break the law and rip off their customers, Americans should have the choice as to how to hold the corporation accountable.”

Yesterday, Wells Fargo CEO Tim Sloan appeared in front of the same Senate Committee and repeatedly lied about the corporation’s continued use of forced arbitration, drawing further attention to the need for CFPB’s rule.

Reed Introduces Legislation to Hold Corporate Executives Accountable for Fraudulent Actions

Washington, D.C. - October 5, 2017 (The Ponder News) -- In an effort to prevent fraudulent and negligent behavior at large financial institutions and hold senior executives accountable, U.S. Senator Jack Reed has introduced the Corporate Management Accountability Act, which asks publicly traded companies to disclose policies on whether senior executives or shareholders bear the costs of paying the company’s fines and penalties.

Reed is introducing the legislation in the wake of several notable instances of negligent behavior by financial institutions - including Wells Fargo’s exploitation of its customers by opening unauthorized accounts and Equifax’s endangering millions of consumers by compromising critical personal information - that continue to undermine public confidence in the financial marketplace.

“Senior executives, many of whom are eager to take credit for a company’s good news, must also take more responsibility for the bad news, especially if it is true that the buck stops with them,” said Senator Reed, a senior member of the Senate Banking Committee. “For example, the Financial Crisis Inquiry Commission concluded ‘the financial crisis reached cataclysmic proportions with the collapse of Lehman Brothers,’ and yet, according to the Congressional Research Service, not a single senior executive officer at Lehman Brothers at the federal level was charged, went to jail, or personally paid a federal fine or penalty for the damage caused at Lehman Brothers that rippled through our economy in 2008. Companies must do a better job of aligning executive incentives so that they are motivated to put their shareholders, and not themselves, first.”

According to Professor Peter J. Henning, who writes for the White Collar Watch column for the New York Times: “A problem in holding individuals accountable for misconduct in an organization is the disconnect between the actual decisions and those charged with overseeing the company, so that executives and corporate boards usually plead ignorance about an issue until it is too late.”

The Corporate Management Accountability Act is one attempt at helping to solve this problem by asking publicly traded companies to disclose whether they expect senior executives or shareholders to pay the cost of corporate fines or penalties.

In the wake of the Wells Fargo scandal, Senator Reed questioned former Wells Fargo CEO John Stumpf during a Banking Committee hearing and pushed for answers as to why the bank opened up millions of fake bank accounts for customers. In August, after it was revealed that as many as 570,000 Wells Fargo customers may have been charged premiums for unwanted auto insurance they did not need, he joined his fellow committee members (Ranking Member) Sherrod Brown, Elizabeth Warren, and others in leading the call for a public hearing to review consumer rights violations by Wells Fargo.

In September, after Equifax revealed that unauthorized parties had obtained sensitive information such as Social Security numbers, addresses, and driver’s license numbers for as many as 143 million people, Senator Reed led a bipartisan group of 37 senators asking the Securities & Exchange Commission (SEC), the Department of Justice (DOJ), and the Federal Trade Commission (FTC) to investigate the sale of nearly $2 million in Equifax securities held by high-level Equifax executives shortly after the company learned of the massive cybersecurity breach. According to the New York Times, Equifax “increased its estimate on the number of Americans whose personal information was potentially exposed to 145.5 million, some 2.5 million more than it had previously disclosed.”

Brown: Equifax Should Spend More on Security, Less on CEO Pay

Washington, D.C. - October 4, 2017 (The Ponder News) -- U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – questioned former Equifax CEO Richard F. Smith today in the wake of a massive data breach that exposed the data of 145 million Americans. According to Equifax, more than 5.2 million Ohioans were impacted by the breach.

Brown called for Equifax to invest more in security and less in huge salaries for CEOs. He pointed out that Equifax spent nearly as much on Smith’s multi-million dollar salary as the company spent on cybersecurity. Since last year, Smith earned about $69 million, while Equifax spends just $85 million a year on cybersecurity.

“In hindsight, do you think Equifax should have spent more money protecting peoples’ data rather than compensating you so well?” Brown asked. “You’re an IT company. That’s just not acceptable.”

Brown also pointed out how unfair Equifax’s business model is for American consumers. Equifax makes money collecting and selling consumers’ data to other big companies. Those consumers are not compensated for the use of their data, in fact, most of the time, they don’t even know it’s being sold. Then Equifax makes even more money by forcing those same consumers to pay Equifax to protect their data after a breach occurs.

“Do you think it’s fair that Equifax gets to take consumers’ data at almost no cost, make millions by selling it to data mining companies and marketers, then charge fees to those consumers for credit monitoring products after they’ve become identity theft victims?” Brown pressed the CEO.

Brown called for consumers to have more control of their own data, similar to how Americans have ownership of their medical records. It is illegal for companies to buy and sell medical records, and patients must consent before their information is transferred. However, companies like Equifax are free to buy and sell sensitive data without people’s consent or knowledge. Brown suggested Americans should have the right to request their data be deleted from Equifax’s system or at the other consumer reporting agencies.

“If you don’t think consumers should be allowed to control their own data, why should a company that has had so many security failures be allowed to control their data? That’s the fundamental question this company hasn’t answered to the public,” Brown said.

Sarbanes Questions Former Equifax CEO about Consumer Data Breach

Washington, D.C. - October 3, 2017 (The Ponder News) -- Congressman John Sarbanes (D-Md.) has questioned former Equifax CEO Richard Smith about the data breach that exposed the personal and financial data of at least 145.5 million Americans.

“There are three things that I think the public is angry about,” said Congressman Sarbanes. “First of all, they want to understand why there weren’t sufficient protections in place on the front end so that this kind of breach wouldn’t happen given the sensitivity of the information that you’re keeping in the company. The second thing is how quickly – once a breach was discovered – you came clean to the public and provided information on what was happening. There seems to have been a delay there that concerns people. The third is whether the services that you’re now providing people are going to be a sufficient assurance to folks going forward – that their identity can be protected, that their information is safe.”

A full video of the exchange appears below.

LUJÁN INTRODUCES LEGISLATION TO HELP CONSUMERS PROTECT THEIR CREDIT FOLLOWING A DATA BREACH

Washington, D.C. - October 2, 2017 - (The Ponder News) -- Earlier this month it was revealed that a massive data breach at Equifax Inc. had compromised the financial and personal information of more than 143 million Americans’ and exposed them to identity theft and credit card fraud.  Congressman Ben Ray Luján (D-NM) today introduced legislation in the House to allow consumers to protect themselves from financial fraud at no cost. U.S. Senator Ron Wyden (D-OR), the senior Democrat on the powerful Senate Finance Committee, recently introduced a similar bill in the Senate.

Lujan’s and Wyden’s bill, known as the Free Credit Freeze Act would guarantee all consumers can use PIN numbers to freeze and thaw their credit – free-of-charge – to stop hackers and others from creating new financial accounts with stolen information. The Equifax data breach, which exposed credit information of nearly a quarter million Americans, as well as Social Security numbers, birthdates and driver’s license numbers of an estimated 143 million more people, has highlighted the vulnerabilities of large data systems and underscored the importance of credit freezes.

Currently, credit reporting agencies like Equifax, charge consumers recurring fees as high as $15 each time they use their PIN numbers to freeze or thaw their credit reports. Luján, who sits on the House Digital Commerce and Consumer Protection Subcommittee, noted that as data breaches have become more frequent, consumers need to have a reliable cost-free way to protect themselves when their sensitive personal information is compromised.

“In the 21st Century, data is currency – companies like Equifax make money through the accumulation of Americans’ most sensitive personal data, and hackers steal millions each year by pilfering this data,” said Luján. “Americans who want to protect their personal and credit information from criminals should not be charged as they take steps to guard against financial fraud – especially when those fees are being charged by the very companies who failed to protect their data in the first place. The Free Credit Freeze Act stops companies from charging consumers to protect their credit by requiring credit agencies to allow consumers to freeze their credit at no charge.”

Luján noted that as massive data breaches become more frequent, companies must do more to protect their databases from intrusion. He also said consumers need a reliable way to get information about whether their personal information was compromised and the ability to take steps to protect themselves once there is a data breach. Cybersecurity experts and the Federal Trade Commission recommend credit freezes as a dependable method of protecting against identity theft and financial fraud.

“Companies like Equifax that have stockpiled massive, insecure databases of Americans’ most sensitive personal data must make security the top priority at every single stage,” Wyden said. “Given the frequency of these mega breaches, it is simply unacceptable for the credit agencies to continue to charge hardworking Americans who want to protect their credit and their identity from fraudsters. The Free Credit Freeze Act gives power back to consumers by requiring credit reporting agencies to provide credit freezes to consumers at no cost. Thanks to Congressman Luján, the Free Credit Freeze Act now has support in both Houses of Congress.”

Days after the Equifax breach was reported, Luján and his Democratic colleagues on the Energy and Commerce Committee wrote a letter to Equifax Chairman and CEO Richard Smith seeking detailed information about how the data breach occurred, what steps Equifax is taking to make affected consumers whole, and what the company is doing to safeguard against security breaches in the future.

Among the consumer protection and advocacy organizations have endorsed the Free Credit Freeze Act are the Consumer Federation of America, and the National Consumer Law Center (on behalf of its low-income clients)

“As consumers, we can’t control how securely our sensitive personal information is held by the credit reporting agencies, but we should at least have the right to freeze that data whenever we want, at no charge, to limit the damage that can occur if it’s exposed to identity thieves,” said Susan Grant, Director of Consumer Protection and Privacy at Consumer Federation of America. 

Pondering: Price Gouging,Terrorism, Nursing Home, Single Payer Health Care, Equifax, DACA, Retirement, Transportation, Education, Human Trafficking, Automatic Knives, Health Insurance

After airline ticket fares skyrocketed before and following Hurricane Irma, legislation has been introduced in the House of Representatives to cap airfares when a disaster has been declared. Under the proposed bill, the “AirFAIR Act”, when a state, territory or U.S. possession makes a disaster declaration, airlines would be prohibited from making price hikes exceeding 30%. Furthermore, the Department of Transportation would have authority to further reduce the maximum allowed price increase during catastrophes.

As the nation contends with the aftermaths of Harvey and Irma and prepares for Hurricane Jose, there have been multiple reports of airlines drastically increasing prices. Some consumers noted price increases from $547 to over $3200. Other travelers posted on social media fares of $1,738 for flights between Miami and Indianapolis and a $2,370 flight between Miami and Los Angeles. Airlines have contended that they did not change their pricing structure and that price changes are dictated by computer algorithms on the companies’ booking websites.

Another bill has been introduced to fight terrorism and force the United Nations to define "international terrorism."

The Define It To Fight would withhold ten percent of United States funding to the United Nations (U.N.) until the intergovernmental organization adopts a definition for "international terrorism." Instead, those funds would be directed to the U.S. Treasury for the purpose of reducing the national debt – which now stands at more than $20 trillion.

The U.N. Security Council adopted Resolution 1373 on September 28, 2001, which created the Counter-Terrorism Committee (CTC) to become the lead U.N. agent in the war on terror. Since then, the CTC has failed to name a single terrorist, terrorist organization or state-sponsor of terrorism. The three U.S.-identified state sponsors of terror – Iran, Syria and Sudan – have submitted reports to the CTC about their compliance with Resolution 1373. In the absence of any U.N. definition of terrorism, all three states have readily proclaimed that they are engaged in a vigorous campaign to combat terrorism despite clear and irrefutable evidence to the contrary.

The United States is the largest contributor to the U.N., providing about $3.3 billion a year to finance U.N. activities and financing 22 percent of their budget.

Eight patients at the Rehabilitation Center at Hollywood Hills tragically lost their lives because of a ‘prolonged power failure’ that shut down the facility’s air conditioning system. After the first three patients died, more than 100 others were evacuated to various medical facilities, one of which is just across the street from the nursing home.

John Barrasso (R - WY) believes Senator Bernard Sanders' (I - VT) single-payer health care bill, S. 1804, is not only a government takeover of health care, but would also put financial burdens on the American people. He has requested the Congressional Budget Office (CBO) to provide a full cost estimate of the bill.

In the wake of the Equifax breach, legislation has been introduced to require accountability and transparency for data brokers like Equifax who are collecting and selling personal and sensitive information about consumers. The Data Broker Accountability and Transparency Act allows consumers to access and correct their information to help ensure maximum accuracy. The legislation also provides consumers with the right to stop data brokers from using, sharing, or selling their personal information for marketing purposes. The bill additionally requires data brokers to develop comprehensive privacy and data security programs and to provide reasonable notice in the case of breaches. The legislation empowers the Federal Trade Commission (FTC) to enforce the law and promulgate rules within one year, including rules necessary to establish a centralized website for consumers to view a list of covered data brokers and information regarding consumer rights.

President Trump has rescinded Obama's DACA program, causing much outcry from those who supported it. However, rumors have been abounding lately that Trump is making a deal with the Democrats to keep it. When confronted with the news, Trump said that no deal had been reached, and the only way he would even consider making the deal would be if the Democrats agreed to fully fund the Wall.

More than 30 states – including Arkansas and Connecticut – have established Century or Centennial Farms designations and awards. However, no federal recognition for 100-year-old farms currently exists. The Century Farms Act that has been introduced in the Senate will direct the U.S. Department of Agriculture to establish a program honoring and recognizing the invaluable contributions of century-old farms.

Because of reports that Washington Republicans are looking at cuts to Social Security and Medicare as well as place new taxes on retirement savings accounts that would reduce workers’ take home pay in order to pay for massive tax cuts for Wall Street, Senator Sherrod Brown (D - OH) has promised in front of the Senate Finance Committee to put up "One hell of a fight". He was not the only one who warned the White House and Senate and House leaders against funding corporate tax breaks by slapping new taxes on retirement savings for workers.

Their reasoning is that ‘rothification,’ would take away the freedom Americans currently have to choose the retirement savings plan that works best for them. Instead, it would force everyone into a Roth account. Unlike 401ks, IRAs or other retirement savings plans many Americans currently use, Roth savings are taxed up front, reducing workers’ take home pay and making it more expensive for Americans to save for retirement.

Roth plans are also more expensive for employers to offer and would make it harder for small businesses to provide retirement plans for their employees.

Further, the Senators also pointed out that rothification is fiscally irresponsible and would add to the federal deficit.

The Moving and Fostering Innovation to Revolutionize Smarter Transportation or the Moving FIRST Act, a bill that will enhance the transportation systems of American communities through the use of innovative technology, has been introduced in the Senate. This legislation will establish and build on the successes of the 2015 Strengthening Mobility and Revolutionizing Transportation (SMART) Cities Challenge administered by the U.S. Department of Transportation (USDOT) by expanding the opportunity for more communities – both urban and rural – to compete for resources that will fund efficient, creative and innovative transportation projects.

The Middle School Technical Education Program (Middle STEP) Act, legislation that would expose middle school students to career and technical education (CTE) programs focused on career exploration, has been introduced in the Senate. The Middle STEP Act would establish a pilot program that allows middle schools to partner with colleges, other postsecondary institutions, and local businesses to develop and implement CTE exploration programs that give students access to apprenticeships or project-based learning opportunities, which are traditionally not available to students until high school or higher education.

The Senate has unanimously passed the Abolish Human Trafficking Act and the Trafficking Victims Protection Act of 2017. The measures will strengthen and reauthorize key programs that support survivors of human trafficking and provide important resources to law enforcement agencies in the fight to end modern slavery. The bills will now be sent to the House of Representatives for consideration.

The Freedom of Commerce Act, S. 1779, which would allow consumers to purchase an automatic knife legal in their state, regardless of where it was manufactured in the U.S has been introduced in the Senate.

Enacted in 1958, the Federal Switchblade Act (FSA) leverages the federal government’s power over interstate commerce to prohibit the purchase, sale and trade of automatic knives between any of the 50 states or U.S. territories. Current federal law prohibits the interstate sale and importation of switchblades, curtailing states’ rights to legislate the legality of certain tools within their borders.

This legislation would repeal certain provisions of the FSA and allow domestic manufacturers to ship and sell their products to buyers in other states, as well as permit the importation certain knife parts. Moreover, the bill would not replace or alter any existing state laws regarding switchblades and other automatic knives. Buck Knives, Inc., a knife manufacturer based in Post Falls, Idaho, supports the legislation.

Currently legal in 27 states, automatic knives are defined based on their opening mechanism and are used primarily by professional trades and outdoor recreationalists

The Small Business Health Plans bill, introduced in the Senate, would allow multiple small businesses to pool their employees, across multiple states, for the purpose of purchasing health insurance coverage for their employees in a large group market. By banding groups of small businesses together, it would provide them with greater negotiating power for better prices and greater benefits for their employees.

Warner Statement on Equifax Data Breach Affecting 143 million U.S. Consumers

Source: Senator Mark R.Warner (D - VA)

Washington, D.C. - September 11, 2017 (The Ponder News) -- U.S. Sen. Mark R. Warner (D-VA), a former technology executive, Vice Chairman of the Senate Intelligence Committee, member of the Senate Banking Committee, and cofounder of the bipartisan Senate Cybersecurity Caucus, released the following statement on the announcement from credit reporting firm Equifax that a data breach could have potentially affected 143 million consumers in the United States:

“The recent news that one of the largest credit reporting agencies and data brokers in the U.S. suffered a breach involving over 143 million Americans is profoundly troubling. While many have perhaps become accustomed to hearing of a new data breach every few weeks, the scope of this breach – involving Social Security Numbers, birth dates, addresses, and credit card numbers of nearly half the U.S. population – raises serious questions about whether Congress should not only create a uniform data breach notification standard, but also whether Congress needs to rethink data protection policies, so that enterprises such as Equifax have fewer incentives to collect large, centralized sets of highly sensitive data like SSNs and credit card information on millions of Americans. It is no exaggeration to suggest that a breach such as this – exposing highly sensitive personal and financial information central for identity management and access to credit– represents a real threat to the economic security of Americans.”

Sen. Warner has been a leader in calling for better consumer protections from data theft. In the aftermath of the Target breach that exposed the debit and credit card information of 40 million customers, Sen. Warner in 2014 chaired the first congressional hearing on protecting consumer data from the threat posed by hackers targeting retailers’ online systems. Sen. Warner also partnered with the National Retail Federation to establish an information sharing platform that allows the industry to better protect consumer financial information from data breaches.

Sen. Warner has been working to develop bipartisan legislation to create a comprehensive, nationwide and uniform data breach standard requiring timely consumer notification for breaches of financial data and other sensitive information.

TESTER DEMANDS EQUIFAX CEO APPEAR BEFORE CONGRESS

Source: Senator Jon Tester (D - MT)



Big Sandy, MT - September 11, 2017 (The Ponder News) -- After Equifax announced that 143 million of its customers had their personal information compromised, U.S. Senator Jon Tester is demanding that the company’s CEO appear before his Senate Banking Committee.

In a letter to the consumer credit reporting agency’s CEO Richard Smith, Tester said he has grave concerns that millions of Americans had their names, Social Security numbers, addresses, driver’s licenses, and birthdates put in jeopardy after a massive data breach at the company.

“I respectfully request that you voluntarily brief or testify before the entire Senate Banking Committee, on which I serve, so we can question you about these new developments of compromised information, how you plan on compensating harmed customers, and how you plan on securing individuals' personal data in the future,” Tester wrote.

Tester asked Smith why it took nearly six weeks to notify customers that their personal financial information had been compromised. He also raised concerns about how this will impact people’s credit.

“As you well know, what happened to consumers in July is unacceptable and has far-reaching impacts beyond a data breach,” Tester added. “I believe it is critically important that Equifax make their customers whole in a timely fashion.”

Tester has a long record of protecting consumers and holding corporate executives accountable. In 2016, Tester grilled Wells Fargo CEO John Stumpf after it was announced the bank illegally opened over two million deposit and credit card accounts without customers’ knowledge or consent.

Tester’s letter to CEO Smith can be found HERE.

Brown Calls on Equifax to Remove Forced Arbitration from Credit Monitoring, Following Data Breach

Source: Senator Sherrod Brown- (D - OH)

Washington, D.C. - September 8, 2017 (The Ponder News) -- U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – is calling on Equifax to immediately remove forced arbitration from all services offered to customers following a data breach that exposed 143 million Americans to identify theft. Equifax is currently touting free credit monitoring and identify protection services for victims of the breach through its TrustedID product. However, Equifax included forced arbitration clauses in the terms of use agreement customers must agree to when signing up for the services – effectively forcing victims of the breach to sign away their rights to seek access to court.

“It’s shameful that Equifax would take advantage of victims by forcing people to sign over their rights in order to get credit monitoring services they wouldn’t even need if Equifax hadn’t put them at risk in the first place. If Equifax is genuine about wanting to protect customers, it must remove forced arbitration immediately from TrustedID and any other services offered to victims of the data breach,” Brown said. “This is just one more example why the Consumer Financial Protection Bureau’s rule banning forced arbitration is badly needed to protect the rights of working Americans.”

Many victims of the Equifax breach were likely enrolled through their credit card company or another third-party credit provider, and may not even know they are customers of Equifax.

Brown is cautioning victims of the breach to carefully read all fine print before signing up for TrustedID or other Equifax products.

The arbitration clauses contained in Equifax’s terms of use agreement to TrustedID are highlighted below. The complete agreement is available here.

U.S. SENATOR TAMMY BALDWIN CALLS FOR SENATE COMMERCE COMMITTEE TO HOLD HEARING ON EQUIFAX DATA BREACH

Source: Senator Tammy Baldwin - (D - WI)

Washington, D.C. - September 8, 2017 (The Ponder News) -- U.S. Senator Tammy Baldwin has called on leaders of the Senate Commerce Committee to hold a hearing on the Equifax data breach.

“I write today to urge you to hold a hearing on an issue impacting the lives of millions of Americans – the recently reported data breach at Equifax, one the nation’s largest consumer credit reporting agencies,” wrote Senator Baldwin, a member of the Commerce Committee. “American consumers deserve answers about this breach and the actions of Equifax executives before this breach was made public.”

Senator Baldwin’s letter to Senate Commerce Committee Chair John Thune (R-SD) and Ranking Member Bill Nelson (D-FL) is available here