Credit Bureaus CEOs’ Links to Data Insecurity and Consumer Discrimination Underscore Need for Greater Industry Oversight from Congress

These Credit Bureau CEOs Have A lot To Answer For Today. 

WASHINGTON, D.C. – Today the CEOs of the big three credit bureaus — Equifax, TransUnion, Experian – will testify on credit reporting reform before the U.S. House Financial Services Committee as many consumers continue to deal with the fallout from the 2016 Equifax data breach that left over 140 million Americans vulnerable to theft of personal data. A year ago, Trump’s CFPB iced a full-scale investigation into how Equifax allowed this to happen – a breach that perversely could be making the company money today after it ceased offering free credit monitoring for the victims.

But Equifax isn’t the only credit bureau to be concerned about — all three of their CEOs have a history of failing consumers on a spectacular level. Before Mark Begor took the reins at Equifax after its massive data breach, he was President of GE’s Capital Retail Bank, where he oversaw illegal and discriminatory credit card practices that cost consumers hundreds of millions of dollars. Experian CEO Craig Boundy advised consumers to better protect their data—just a year before Experian’s own massive data security failure that exposed the personal data of 15 million people. And TransUnion CEO James Peck told investors they could profit from the Equifax data breach—after his company was ordered to pay $17 million for lying to consumers.

“Something the credit bureau CEOs have in common other than collecting gigantic salaries is being very bad at their jobs,”said Jeremy Funk, spokesman for Allied Progress. “Millions of Americans will have to worry about their identities being stolen for the rest of their lives thanks to Equifax and Experian’s utter failure to properly safeguard consumer data. That these CEOs have also overseen consumer discrimination or deception in the past doesn’t instill much confidence in their ability or willingness to prevent something like this from happening again. That is why Congress must protect consumers by holding the credit bureau industry accountable and decline their assurances that things will get better on their own.”

MEET THE GUYS OVERSEEING OUR CREDIT SECURITY:

Equifax CEO Mark Begor: Raking In Millions Despite History Of Overseeing Discriminatory Credit Card Practices

Mark Begor Raked In Around $20 Million As CEO Of Equifax Last Year—For Not Even A Full Year’s Work.

Equifax CEO Mark Begor Made Approximately $20 Million In 2018, Even Though He Only Started In April.

Mark Begor Made Between $18.5 And $20 Million In 2018 At Equifax, Including $7 Million In Shares, Restricted Stock Units, And Stock Options. “Mr. Begor’s base salary is $1.5 million […] and he is eligible for an annual incentive bonus of 100% of his annual base salary (the “Target Annual Bonus Opportunity”) with a maximum payout of 200% of annual base salary, depending on the achievement of performance criteria established by the Board. For 2018, Mr. Begor’s Target Annual Bonus Opportunity will be pro-rated. […] Mr. Begor will be granted an initial equity award with a value of $7 million, consisting of (i) $3.5 million in performance shares, (ii) $1.75 million in time-based RSUs and (iii) $1.75 million in stock options. In addition, Mr. Begor will be awarded a one-time special grant in the amount of $10 million […]” [Equifax Inc. Securities and Exchange Commission Schedule 14A, 2018]

  • Begor Has Been CEO Of Equifax Since April 2018.“Equifax on Wednesday named Mark Begor […] as its new chief executive. […] Mr. Begor […] will start at Equifax on April 16.” [Stacy Cowley, “Equifax Picks Private Equity Executive as New C.E.O.,” The New York Times, 03/28/18] 

Upon Hiring Begor, Equifax Planned On Paying Him As Much As $21.5 Million, Including A Salary And Bonus Of “Up To $4.5 Million” And “Stock And Options Valued At $17 Million.” “Equifax said it would give Mr. Begor stock and options valued at $17 million this year and an annual salary and bonus of up to $4.5 million.” [Stacy Cowley, “Equifax Picks Private Equity Executive as New C.E.O.,” The New York Times, 03/28/18]

Before Working At Equifax, Mark Begor Was President Of GE’s Capital Retail Bank, Which Was Ordered By The CFPB To Repay Consumers $225 Million For Discriminating Against Hispanic Consumers.

While Mark Begor Was President Of GE’s Capital Retail Bank, It Was Ordered By The CFPB To Repay Consumers $225 Million For Discriminating Against Hispanic Consumers.

GE Capital, Now Known As Synchrony Bank, Was Ordered By The CFPB To Pay $225 Million In Consumer Relief For “Illegal And Discriminatory” Practices. The CFPB ordered “GE Capital Retail Bank (GE Capital), now known as Synchrony Bank, to provide an estimated $225 million in relief to consumers harmed by illegal and discriminatory credit card practices.” [“CFPB Orders GE Capital to Pay $225 Million in Consumer Relief for Deceptive and Discriminatory Credit Card Practices,” Consumer Financial Protection Bureau, 06/19/14]

From 2009 To 2012, GE Capital Offered Two Promotions To Customers With Delinquent Accounts That Were Not Offered To Individuals Who Qualified And Had Requested Communications In Spanish, Nor Was The Offer Extended To Residents Of Puerto Rico.“GE Capital had two different promotions that allowed credit card customers with delinquent accounts to settle their balances by paying off a specific portion of their debt. […] GE Capital did not extend these offers to any customer who indicated that they preferred to communicate in Spanish or had a mailing address in Puerto Rico, even if the customer met the promotion’s qualifications. This meant that Hispanic populations were unfairly denied the opportunity to benefit from these promotions.” [“CFPB Orders GE Capital to Pay $225 Million in Consumer Relief for Deceptive and Discriminatory Credit Card Practices,” Consumer Financial Protection Bureau, 06/19/14]

  • Mark Begor Was President And CEO Of GE Capital Retail Finance From 2002 To 2011, Totaling Over Nine Years.Begor includes on his LinkedIn profile, “President and CEO GE Capital Retail Finance (Synchrony Financial) and GE SVP Dates Employed Jan 2002 – Apr 2011.” [“Linkedin Profile for Mark Begor,” LinkedIn, accessed 02/22/19]

Experian North America CEO Craig Boundy: Promoting Data Privacy While Failing To Safeguard Consumers’ Info

Experian North America CEO Craig Boundy Advised Consumers To “Take Active Steps” To Protect Their Digital Information—Just One Year Before Experian Allowed The Data Of 15 Million American Consumers, Including Social Security Numbers To Be Exposed

In 2014, Experian NA CEO Craig Boundy Advised Consumers To “Take Active Steps” To Protect Their Digital Information, Such As Monitoring Credit Reports…

In 2014, Experian NA CEO Craig Boundy Said That It Is “Really Important For All Of Us In This Country Take Active Steps To Make Sure We’re Securing Our Digital Identities,” Including Monitoring Credit Reports. In a 2014 interview, Craig Boundy, when asked about consumer concerns about data privacy, said: “I say it is really important for all of us in this country take active steps to make sure we’re securing our digital identities. We do work — we do things in our lives online. We buy things online. We go to shops. And people steal our information on line. There are steps we can take and I will give you two easy ones today that will improve the safety of identities. The first is, change your passwords regularly. Sounds trite and easy thing to say. But it really does make the difference. The second is use monitoring of your credit report to find out when things are happening to your online profile or your credit profile to make sure that they really are true. And if you need to, you’re able to take action to resolve the issues.” [Gerri Willis, David Samadi, Marc Siegel, “THE WILLIS REPORT for September 30, 2014,” The Willis Report, 09/30/14]

…Just One Year Before A Hack Of Experian Exposed The Personal Data Of 15 Million People Across The Country, Including Social Security Numbers.

Experian North America Was Hacked In 2015, Exposing “Sensitive Information Of 15 Million People In The U.S.” “Cyberthieves stole the sensitive information of 15 million people in the U.S. – from Social Security numbers to names and addresses – by hacking into a server at Experian, company officials said this week. Its North American headquarters is in Costa Mesa. The data breach affected consumers who applied for T-Mobile USA services from Sept. 1, 2013, through Sept. 16, 2015, company officials said. T-Mobile, the third-largest U.S. cellphone carrier, uses Experian to vet the creditworthiness of applicants. The information is stored and maintained in Experian’s server for at least 25 months, mandated by credit laws, the financial services company said.” [Lily Leung, “Experian apologizes for data breach,” The Orange County Register, 10/03/15]

  • The Compromised Data Included “Names, Addresses And Birthdates, As Well As Encrypted Fields With Social Security And Other Identification Numbers (Such As Driver’s License And Passport).” “The records included names, addresses and birthdates, as well as encrypted fields with Social Security and other identification numbers (such as driver’s license and passport), plus additional information used in T-Mobile’s credit assessments.” [Roy Urrico, “15 Million T-Mobile Customer Records Exposed,” Credit Union Times, 10/02/15]
  • In A Statement, Craig Boundy Apologized On Behalf Of The Company “‘For The Concern And Stress That This Event May Cause.’” “Craig Boundy, chief executive of Experian North America, said in a statement: ‘We take privacy very seriously and we understand that this news is both stressful and frustrating. We sincerely apologize for the concern and stress that this event may cause.’” [Lily Leung, “Experian apologizes for data breach,”The Orange County Register, 10/03/15]

TransUnion CEO James Peck: Raking In Millions While Misleading Consumers For Profit

James Peck Has Raked In Over $21 Million As TransUnion’s CEO.

James Peck Was Paid Over $21 Million From 2015 To 2017, Including $8.4 Million In 2017 Alone. 

James Peck Was Paid A Total Of $8,465,989 In 2017 Alone. In 2017,James Peck was paid $950,000 in salary, $5,412,447 in stock awards, $1,860,891 in “non-equity incentive plan compensation,” and $242,651 in “all other compensation.”[Transunion, Securities and Exchange Commission Schedule 14A, 03/23/18]

  • James Peck Has Been TransUnion’s President And CEO Since December 2012. [“Our Leadership Team,” TransUnion, accessed 02/21/19]

Under James Peck’s Leadership, TransUnion Was Ordered To Pay Over $17 MillionIn Fines And Restitution For Misleading Consumers

While James Peck Was CEO Of TransUnion, The CFPB Ordered It To Pay Nearly $14 Million To Harmed Consumers, Plus A $3 Million Fine, For Misleading Them About The Usefulness And True Cost Of Its Products. 

In January 2017, The CFPB Ordered TransUnion To Pay Nearly $14 Million In Restitution And A $3 Million Fine For “Deceiving Consumers About The Usefulness And Cost Of Credit Scores They Bought” And Falsely Luring Consumers Into “Credit Services Advertised As Free.”“A U.S. regulator on Tuesday ordered credit reporting agencies TransUnion and Equifax to pay more than $23.2 million in fines and restitution for deceiving consumers about the usefulness and cost of credit scores they bought. The U.S. Consumer Financial Protection Bureau said the payments also resolve charges that TransUnion and Equifax lured consumers into enrolling in credit services advertised as free or costing only $1, but which could cost more than $200 a year. TransUnion will reimburse $13.93 million to consumers and pay a $3 million civil fine, while Equifax will reimburse $3.8 million and pay a $2.5 million civil fine, the CFPB said.” [“TransUnion And Equifax Have Been Fined $23 Million For Deceiving Customers Over Credit Scores,” Reuters, 01/04/17]

James Peck Told Investors That TransUnion Was Seeing “‘Very Strong’” Performance In The Wake Of The Equifax Breach And Could Reap Profits From It

In The Wake Of The Equifax Breach, Jim Peck Reported “‘Very Strong’” Performance For TransUnion And Suggested That The Breach Could Increase Demand For Its Products. 

In 2017, TransUnion CEO Jim Peck Reported To Investors That The Company Was Earning “’Very Strong Quarterly Performance.’” “According to TransUnion CEO Jim Peck, the company had a ‘very strong quarterly performance,’ with revenue up 13.8% on a year-over-year basis and exceeding analysts’ expectations. Even Equifax reported its second-best quarter ever, with sales rising and earning $835 million, or just 2% below what the company projected.” [Letter from Americans for Financial Reform et. al to Craig Boundy et. al, 11/17/17]

Jim Peck Suggested That The Equifax Breach Could Increase Demand For Its Identity Theft Prevention Or Credit Monitoring Products, Even If Those Products Could Be Obtained For Free. “[…] TransUnion CEO Jim Peck had the confidence to predict the Equifax breach would not harm its direct-to-consumer business because ‘If anything there is probably more engagement from the consumer when these kinds of things happen.’ Furthermore, we have seen reports that some consumers have ended up with paid identity theft prevention or credit monitoring subscriptions when they were trying to access free services or a one-time security freeze.” [Letter from Americans for Financial Reform et. al to Craig Boundy et. al, 11/17/17]

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