Actions by Equifax to Deny Americans Harmed in Data Breach Their Day in Court a Reminder of the Importance of the CFPB’s Arbitration Rule
WASHINGTON, D.C. – Following a data breach that put the financial information of 143 million consumers at risk, Equifax is using their offer of free credit monitoring for those harmed in the breach as a Trojan horse to deny these victims their constitutional right to band together and have their day in court. Anyone who signs up for these services with Equifax will be forced into secret arbitration proceedings if they choose to hold the company accountable for the breach.
Tens of millions of consumers exposed in the breach were not Equifax customers so they would not be bound by the arbitration clause the company forces on its customers. The offer of free credit monitoring services is designed to get these non-customers signed up and covered by the arbitration clause — in effect stripping them of their right to go to court.
The unfolding scandal underscores the importance of the Consumer Financial Protection Bureau’s (CFPB) new rule on forced arbitration. Had the rule been in place before this breach, Equifax customers would be free to join together and go to court and the company couldn’t force existing or new customers into secret arbitration tribunals where panels, often hand picked by industry, call the shots. Republicans in Congress are currently attempting to repeal the CFPB’s important new rule that protects consumers from forced arbitration before it can go into effect.
“Consumers place an incredible amount of trust in Equifax and other credit monitoring and scoring services to safeguard their deeply personal financial information. Equifax is doubling down on this data breach with a breach of that trust. This is nothing more than an underhanded attempt to deny the victims of this cyber attack their day in court. Equifax is using a Trojan horse to get those who were wronged in the door so they can deny them their day in court. It is nothing more than a disingenuous attempt to save face… and money,” said Karl Frisch, Executive Director of Allied Progress.
“There couldn’t be a clearer example of why this new rule from the Consumer Financial Protection Bureau is so essential. The CFPB’s arbitration rule will make sure big corporations like Equifax can’t deny victims their day in court. If Republicans continue with their effort to repeal the arbitration rule, they will have to answer to every one of the 143 million Americans who are victims of this breach,” he continued.
Though their attorney claims they had no knowledge of the breach at the time, Equifax executives sold nearly $2 million in stock before the news broke. Convenient.
# # #
Allied Progress uses hard-hitting research and creative campaigns to stand up to Wall Street and powerful special interests and hold their allies in Congress and the White House accountable.