Equifax’s failure to fend off hackers, who accessed the personal and financial information of 143 million Americans, has doomed the credit-reporting company, a technology attorney predicts.
New York City-based technology law expert Mark Grossman told CNBC that he doesn’t see how Equifax could recover from the massive data breach.
“We’ve seen a $6 billion loss in market cap, estimated losses from these breaches in excess of $20 billion,” he said in an interview on CNBC’s program “Closing Bell.”
“This is ugly. The facts are still unfolding. It’s going to get worse. … We’re pointing to a bankruptcy. We’re pointing to a takeover.”
Loss in Equifax share value is just the beginning of the damage. The company is already facing 23 class-action lawsuits filed by consumers whose data is now in the hands of unknown hackers, who may use it for a multitude of nefarious purposes.
The Federal Trade Commission said on Sept. 14 that it is investigating the Equifax breach and a congressional hearing is scheduled for Oct. 3. Equifax CEO Richard Smith is expected to testify before the House Energy and Commerce Committee.
Hackers broke into Equifax’s website and database in mid-May and harvested consumer information until the breach was detected on July 29. The hack exposed the names of U.S. consumers and their social security numbers, dates of birth, addresses, driver’s license numbers, and other information, including the credit card information of more than 200,000 consumers.
Mr. Grossman also told CNBC that it’s almost certain the Equifax disaster could result in a new cybersecurity law.
“I see this as the straw that broke the camel’s back. When you think about it and you compare our privacy protections to what they have in the EU, it’s a joke in this country,” he told CNBC, noting that EU citizens have the right to have all their data removed from online databases.