On Thursday, Equifax Inc announced and accepted their low quarterly profit. It was expected, after the company paid for security and lawyers. Their infamous breach led to third-quarter operating expenses that were the highest on record. Supposedly, the company is facing more than 240 class-action lawsuits and more than 60 regulatory or governmental inquiries.
It has been noted that Equifax will face additional costs between $56 million and $110 million to continue providing services. Equifax mentioned to the Securities and Exchange Commission “We cannot assure that all potential causes of the incident have been identified and remediated and will not occur again”
The Dean of Vanderbilt’s Owen Graduate School of Management, Eric Johnson, added that ambiguity may affect Equifax’s future business.
“They need to be able to nail those pieces and have a clear explanation of what happened and how they solved it,” says Johnson. “I think they can get there, but they aren’t there now.”
Johnson also warned about that the costs, because the breach might reach hundreds of millions of dollars.
“We believe that certain of our customers have determined to defer new contracts or projects unless and until we can provide assurances regarding our ability to prevent unauthorized access to our systems and the data we maintain,” said the SEC filing.
Mark Rasch, a former U.S. Federal cyber-crimes prosecutor announced that Equifax should follow better communication practices, because hackers might still be inside the system.
“What I want to know is ‘How did they get in?’ and ‘How are they preventing hackers from getting in the future?’ They haven’t answered those questions,” said Rasch.
“Some of our customers have determined to defer new contracts or projects unless and until we can provide assurances regarding our ability to prevent unauthorized access to our systems and the data we maintain,” Equifax said.
Equifax has scheduled the conference call on Friday at 8:30 a.m. in New York for their executives to accept questions from analysts. The net income drop is about $96.3 million, or 79 cents a share, from $132.8 million, or $1.09 a year earlier.