Equifax still trying to dig out of deep hole

2017-11-20 by Ronn Torossian

Equifax still trying to dig out of deep holeIf 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.

About Ronn Torossian

Ronn Torossian is the Founder and CEO of 5W Public Relations. He is an experienced leader in the public relations industry with over 20 years of experience. Ronn Torossian has been named as Public Relations executive of the year by the American Business Awards, and has run countless award-winning Public Relations programs.

ronn torossian 5wpr ceo

Ronn Torossian: Insights from a Native New Yorker and CEO of 5WPR

Ronn Torossian is the founder and CEO of 5W Public Relations, one of the largest independently-owned PR firms in the United States. With over 20 years of experience crafting and executing powerful narratives, Torossian is one of America's most prolific and well-respected Public Relations professionals. Since founding 5WPR in 2003, he has led the company's growth, overseeing more than 250 professionals in the company's headquarters in midtown Manhattan. With clients spanning corporate, technology, consumer and crisis, in addition to digital marketing and public affairs capabilities, 5WPR is regularly recognized as an industry leader and has been named "PR Agency of the Year" by the American Business Awards on multiple occasions. Throughout his career, Torossian has worked with some of the world's most visible companies, brands and organizations. His strategic, resourceful approach has been recognized with numerous awards including being named the Stevie American Business Awards 2020 Entrepreneur of the Year, the American Business Awards PR Executive of the Year, twice over, an Ernst & Young Entrepreneur of the Year semi-finalist, Metropolitan Magazine's Most Influential New Yorker, a 2020 Top Crisis Communications Professional by Business Insider, and a recipient of Crain’s New York 2021 Most Notable in Marketing & PR. Torossian is known as one of the country's foremost experts on crisis communications, and is called on to counsel blue chip companies, top business executives and entrepreneurs both in the United States and worldwide. Torossian has lectured on crisis PR at Harvard Business School, appears regularly on CNN & CNBC, is a contributing columnist for Forbes and the New York Observer, and has authored two editions of his book, "For Immediate Release: Shape Minds, Build Brands, and Deliver Results With Game-Changing Public Relations," which is an industry best-seller. A NYC native, Torossian lives in Manhattan with his children. He is a member of Young Presidents Organization (YPO), and active in numerous charities