Equifax Inc. announced a comprehensive resolution of significant U.S. consumer-related litigation and regulatory matters facing the company related to its 2017 cybersecurity incident.
The $671 million resolution includes settlement agreements that would resolve the multi-district consumer class action litigation, as well as investigations by the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), the Attorneys General of 48 states, Puerto Rico and the District of Columbia, and the New York Department of Financial Services (NYDFS).
If approved by the Court, a consumer restitution fund of up to $425 million will be available to pay for three-bureau credit monitoring for consumers whose information was impacted in the 2017 breach, actual out-of-pocket losses related to the breach, and other consumer benefits such as identity restoration services. Equifax has been providing free credit monitoring services to consumers since September 2017.
"This comprehensive settlement is a positive step for U.S. consumers and Equifax as we move forward from the 2017 cybersecurity incident and focus on our transformation investments in technology and security as a leading data, analytics, and technology company," said Equifax Chief Executive Officer, Mark W. Begor. "The consumer fund of up to $425 million that we are announcing today reinforces our commitment to putting consumers first and safeguarding their data - and reflects the seriousness with which we take this matter. We have been committed to resolving this issue for consumers and have the financial capacity to manage the settlement while continuing our $1.25 billion EFX2020 technology and security investment program. We are focused on the future of Equifax and returning to market leadership and growth."
As part of the resolution, Equifax has agreed to continue the significant steps it has taken in the wake of the cybersecurity incident to enhance its information security and technology program. It also has agreed to make payments totaling $290.5 million directly to certain state and federal regulatory agencies and to pay attorneys' fees and costs in the multi-district litigation. Equifax recorded an accrual of $690 million in the first quarter of 2019 and expects to increase its accrual by approximately $11 million in the second quarter of 2019 principally related to the comprehensive consumer settlement, resulting in a total $701 million accrual related to the 2017 cybersecurity incident.
If the Court approves, members of the settlement class will receive notification of their rights and options as part of the multi-district litigation. More information can be found at www.equifaxbreachsettlement.com.
Additional detail on the terms of the proposed settlement in our Form 8-K filed today with the Securities and Exchange Commission.