Not only did Equifax suffer a massive data breach that potentially compromised the personal data of up to 143 million in the U.S. and then wait 6 weeks to inform the public—the credit-reporting company is directing those who want to know if they were a victim of the breach to a service that forces them into a “rip-off clause” that makes them give up their right to file or join class-action lawsuit against the company.
Robert Weissman, president of advocacy group Public Citizen, called it “one of the most brazen corporate wrongdoer maneuvers in memory.”
MarketWatch reported:
A new rule from the Consumer Financial Protection Bureau (CFPB) bans companies from using these consumer-unfriendly mandatory arbitration clauses. But it doesn’t go into effect until Sept. 18. It’s also already in the cross-hairs of Republicans—a point noted CFPB creator Sen. Elizabeth Warren (D-Mass.), who called the breach “Exhibit A for why we must stop @GOP from reversing the @CFPB’s rule protecting your right to join class actions.”
That tweet was included in a series from Warren that took aim at Equifax:
The clause also drew from Amanda Werner, arbitration campaign manager at Public Citizen and Americans for Financial Reform. “It is despicable that Equifax would exploit consumers’ need for identity theft monitoring to avoid accountability for this devastating breach. Perhaps more despicable, at this very moment, U.S. senators are weighing legislation to take away our right to hold companies like Equifax accountable in court,” she said.
Brian Fung writes at Washington Post‘s “The Switch” blog that
In addition, he writes,
But according to Joel Winston, a former deputy attorney general for the state of New Jersey and a privacy and data protection lawyer, that may not reign in Equifax’s ability to stop people from banding together in a suit. Fung continues:
New York Attorney General Eric T. Schneiderman announced Friday that he is launching a formal investigation into the breach. On Twitter, Schneider blasted the rip-off clause, writing: “This language is unacceptable and unenforceable. My staff has already contacted @Equifax to demand that they remove it.”
House Financial Services Committee Chairman Jeb Hensarling (R-Texas), meanwhile, announced that it would hold a hearing into the breach.
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