NEW YORK/TORONTO:
Equifax Inc said it expects costs related to its massive 2017 data breach to surge by $275 million this year- offset by $75 million in insurance proceeds- suggesting the incident at the credit reporting bureau could turn out to be the most costly hack in corporate history.
“It looks like this will be the most expensive data breach in history,” said Larry Ponemon, chairman of Ponemon Institute, a research group that tracks costs of cyber attacks.
Equifax carried cyber liability coverage, which market sources say was led by London-based Beazley P.L.C.
Total costs of the breach, which compromised sensitive data of more than 147 million consumers, could be“well over $600 million,” after including costs to resolve government investigations into the incident and civil lawsuits against the firm, he said.
The costs mainly reflect technology and data security upgrades, legal fees, and free identity theft protection and credit monitoring offered to the more than 147 million consumers affected by the cyber security incident, the company said in a conference call.
Equifax reported fourth-quarter profits that topped Wall Street forecasts after earlier in the day disclosing that an additional 2.4 million people were affected by the cyber attack.So far, the Atlanta-based company has recorded breach-related expenses of $114 million, net of insurance recoveries.
Equifax said in September that criminals had breached its systems and stole personally identifiable information of U.S., UK, and Canadian consumers, including names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license and credit card numbers.
That disclosure prompted outrage from politicians and consumer advocates around the world, a string of government probes into company and the departure of top executives.
“It is possible that further analysis will identify additional consumers affected or additional types of data accessed,” Equifax said in a regulatory filing on Thursday.
As a result of the 2017 cyber security incident, Equifax said it was the subject of numerous class action lawsuits, as well as investigations by U.S. federal, state, local and foreign governmental officials and agencies.