If you’re making a list of companies that had a rough PR road in 2017, Equifax would certainly be on that list. The credit monitoring and reporting company, which prides itself on gathering as much personal financial data as it can on customers, suffered a massive data breach, causing consumer confidence in the company to plummet.
Equifax Profits Drop Sizeably
Since the headlines broke about the breach, Equifax has hemorrhaged customers, seeing profits decline in what the Associated Press described as a “sizeable” manner. The company admitted it expects to spend about $70 million on this issue in this quarter alone.
How bad was the sales slump? The company reported a 27-percent sales slump in just the third quarter profit alone. The vast majority of that poor showing is being blamed directly on the hack, which exposed the personal data of more than 140 million U.S. customers.
On a recent conference call, reported on by the AP, Equifax interim CEO Paulino do Rego Barros, Jr., opened with an apology for the breach. It’s something he will be doing a lot of, and something he should be doing a lot of. His predecessor, Richard Smith, who resigned shortly after the hack, has been apologizing as well.
And that’s a good start on both their parts, but it’s not enough…not nearly enough. The company is losing customers because it has not yet been able to reassure them their data is actually secure. Not knowing their data has been compromised is one fear. Knowing someone’s has, and not knowing what the company is doing about it, is another, larger, fear.
Equifax Executives Sold Shares Following Breach
To battle this exact concern, Equifax is promoting its ideas for how to repair the burned bridge and reassure customers that things are safe now. But those efforts are being thwarted by reports that at least four executives sold about $1.8 million shares of stock immediately following the breach. The company argues they did nothing wrong. However, for consumers, this is adding insult to injury.
And government regulators are curious about this as well. Equifax has received subpoenas from the Securities and Exchange Commission, as well as the US Attorney’s Office. The nature of the different subpoenas may be unclear. They could have to do with the breach, the stock sales or both. Either way, it’s clear the government is not going to allow the company to get back to business, as usual, any time soon. Consumers, if the trend doesn’t change, may see to it a return to status quo takes even longer than that.
Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States