Equifax, We Shouldn’t Have to Pay for Corporate Stupidity

Businessman confused

Enron.

It’s a name that can cause any trader, businessperson or politician to get jittery.

Despite happening over 15 years ago, the scandal is still fresh in the minds of many. One misstep, one small slip up, and the sharks start to smell blood in the water.

It really doesn’t take all that much to get people riled up nowadays. Perhaps we’re all just sick of corporations giving us more grief.

Even the darlings of the corporate world aren’t having an easy time keeping a squeaky clean image lately.

Google has faced criticisms for how it handled the firing of conservative employee James Damore. Facebook is still dealing with the fiasco of US election meddling from Russia. Even Amazon boss Jeff Bezos has drawn the personal ire of President Trump.

It seems everyone is looking for someone or something to blame as of late. And those prayers were finally answered.

Equifax led itself like a lamb to slaughter.

Two major security breaches, millions of peoples’ details leaked, insider trading, an FBI investigation, they’ve got it all. A big, fat, juicy scandal.

If you haven’t caught up on all the details, I’ll lay it out for you.

Sometime around March Equifax learned its systems had been hacked. They seemingly thought they had it under control, and kept quiet.

Then in May a second breach. This time Equifax didn’t detect it until 29 July.

Just three days later, three Equifax executives sold almost US$2 million worth of stock. Now, I’m a firm believer in ‘innocent until proven guilty’, but this doesn’t paint a great picture.

A month later on 7 September Equifax came clean about the hack. More than 143 million Americans had personal information that had been compromised. Social security numbers, credit card information, birthdates, all leaked.

It will go down as one of the worst data breaches in history.

Insider trading could just be salt in the wound, at this point. 

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The executives claim they had no knowledge at the time. Only time will tell if that’s the truth. It’s already too late for some; heads have started to roll.

Equifax’s head of information and their head of security have both resigned. The latter was also subjected to a nasty witch hunt online. Internet detectives discovered she had little in the way of formal technology training, and her only tertiary studies were in music composition.

Naturally it was just more fuel for the fire. Twitter exploded, with the hashtag #unqualifiedfortech trending globally.

Even yesterday the company’s Twitter account was still making blunders. The account made a series of tweets that linked to the wrong website — three times. A site that was deliberately set up to mimic a phishing site. The kind that steal your information.

It would almost be funny if it weren’t so sad.

It’s also led to a lot of vitriol from customers. It’s safe to say there will be quite a few more people whose careers will soon come to an end. The only question is, will there be further consequences?

We know that the FBI is involved in investigating the hack. Though the trading conducted by the executives could also come under scrutiny. It is unlikely anyone will end up behind bars though.

The class action lawsuits will likely come, and more people may lose their jobs. And just like it always does, the world will keep on spinning. Another white collar crime largely unpunished.

I’m sick of it, you’re sick of it, everyone is sick of it.

Clearly companies like Equifax can’t be trusted with our data.

Blockchain technology – saviour of the global financial system

Fortunately the future may have the solution; the blockchain.

Yes, the newfangled technology behind bitcoin and other cryptocurrencies is more than just an investors dream. It could fix a lot of our security problems.

Take this example from Andreas Freund, a blockchain advisory consultant:

I tell our clients our goal is to turn a billion-dollar bank into a billion one-dollar banks,

The incentive to go after these little honeypots is much less than for going after one big honeypot.

In the case of Equifax, rather than dollars it could be identities.

Even if you can penetrate one identity, you’ll have to extend the same effort to hack another and another.

This is just one example of the power of blockchain. There are almost no limitations to how far it could reach.

It’s going to change our businesses, our society and our lives. Think big…really big. This could be like the next internet. Which is a big claim, but one that I’m confident in.

You’ve no doubt already seen some of our other editors heap praise on bitcoin and cryptos. For good reason, as well. It’s all thanks to the blockchain.

As the crooks and incompetents of the world (like Equifax) die out, blockchain is ushering in a new age. It’s still got a lot to prove. And just like the internet, it’s going to take time. Whether that’s five years, a decade or 50 years, we won’t know. Though I’d wager sooner rather than later.

It’s going to be a wild ride. And just like the dot-com era, there are going to be winners and losers. So if you’re game, join the cryptocurrency revolution.

Regards,

Ryan Clarkson-Ledward,
Contributing Editor, Money Morning

Ryan Clarkson-Ledward

Ryan Clarkson-Ledward

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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