Published: Thu, January 11, 2018
Business | By Tara Barton

Warren, Warner propose 'massive' fines for breaches at credit bureaus

Warren, Warner propose 'massive' fines for breaches at credit bureaus

Elizabeth Warren (D-Mass.) and Mark Warner (D-Va.) would add a $50 fine for each additional piece of compromised personally identifiable information for each consumer.

Under this legislation, Equifax would have had to pay at least a $1.5 billion penalty for their failure to protect Americans' personal information.

Senators have proposed new legislation which would impose strict liability penalties on credit agencies (CRAs) in the event of a data breach.

If the legislation had been in place when Equifax had a data breach previous year that exposed the Social Security numbers and birth dates of as many as 145.5 million Americans, Equifax would have faced a fine of at least $1.5 billion, the senators said. "The penalties would double in cases where the credit reporting firm did not comply with federal data security standards or failed to notify officials of the breach in a timely manner".

"The financial incentives here are all out of whack - Equifax allowed personal data on more than half the adults in the country to get stolen, and its legal liability is so limited that it may end up making money off the breach", she said in a statement.

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It also would establish a new Office of Cybersecurity at the Federal Trade Commission, and charge it with monitoring cyber security at those companies. The programmatic and reporting requirements, together with greater transparency and accountability about companies' actions to protect consumer data, will help strengthen the internet ecosystem and enhance trust in the digital economy. "This bill will ensure that companies like Equifax - which gather vast amounts of information on American consumers, often without their knowledge - are taking appropriate steps to secure data that's central to Americans' identity management and access to credit".

The Data Breach Prevention and Compensation Act is created to make the big CRAs more accountable, following a damaging breach at Equifax past year which affected 145.5m Americans and 700,000 Brits.

Consumers Union has urged lawmakers to make data security a national priority and pass legislation that would require companies to adopt reasonable practices to ensure the safety of consumer credit data. "Equifax might make money off the breach", Warren said, citing the sales of credit production products.

"This approach says it's not about having a bunch of regulators come in and tell them how to design it, it's about saying there are real consequences if you do not provide adequate security for this data", Warren said.

Senators Mark Warner and Elizabeth Warren's bill is in response to a data breach at Equifax that put the information of 145 million Americans at risk.

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