Elizabeth Warren: "Equifax may actually make money off this breach" ...
Wood: You've introduced two bills in response the Equifax hack, including one that would give the FTC, the Federal Trade Commission, authority to penalize credit agencies that don't protect data adequately. Can you tell us about that?
Warren: Sure. So just to get it on the table, the first one is the ability of consumers just to be able to "turn off" Equifax, so that if they don't want Equifax selling their information so that somebody can open a checking account or a credit card in their name, consumers ought to be able to do that. Or if consumers don't want Equifax to sell their data to, you know, some cruise company that's looking for prospects, the consumer ought to be able to do that. After all, the consumer didn't agree to do business with Equifax, so we think the consumer ought to have a lot more control over their data.
But the second part is this fundamental question: How do you make sure going forward that Equifax and the other credit-reporting agencies are going to take the right level of security? Clearly they failed badly here. And the problem is there's no real penalty for them. You know, it's not like consumers can say, "Well, that's it. I'm never going to do business with Equifax again." That's not how it works with credit-reporting agencies. In fact, Equifax may actually make money off this breach because it sells all these credit-protection devices, and even consumers who say, "Hey, I'm never doing business with Equifax again," well, good for you, but you go buy credit protection from someone else, they very well may be using Equifax to do the back office part. So Equifax is still making money off their own breach.
So what Sen. Warner and I proposed is what's called "strict liability." It says if for any reason your data gets stolen, it's 100 bucks for the theft of the first piece of data, and 50 bucks for the theft of every following piece of data for every consumer whose data is stolen up to potentially half the value of the company. It's hard. It's flat. It's easy to read. And the point is to get the credit-rating agencies to take the right level of security. They take the right level of security, they invest enough in security, then the American people will be protected. They don't invest enough in security and shoot, the fact that 145 million Americans have already lost data? We can count on it happening again and again and again. ...
Warren: Look, we've got a recurring problem in Washington. And that is that big corporations that can spend a lot of money lobbying and a lot of money making campaign contributions and a lot of money hiring PR firms and bought-and-paid-for experts can get what they want much of the time here in Washington. And in the case of these big financial outfits, it's to protect themselves from regulation. Don't get any laws passed, don't make any changes. But you know, I get that they've got a lot of money and a lot of concentrated power, but there's a whole lot more of us than there is of them. There are 145 million adults in America whose personal financial information has been stolen. And who knows how it's being used now in the depths of the internet? Who's buying it? Not only here in America for financial reasons, but all around the world. What foreign countries are buying it in order to do what kind of injury to people individually and to this country? So my view on this is we get enough people across the country speaking up about this, enough people demanding that their senators and their representatives put some kind of checks in place over Equifax and the other credit-reporting companies. I actually think we can make a difference here. You know, I really like to underline, this isn't partisan. Republicans and Democrats had their credit information stolen. Social Security numbers are now floating around out there for both Republicans and Democrats. And it is now up to the federal government to put some rules in place so this doesn't happen again.