Consumer groups slam Equifax over security breach arbitration clause


Consumer watchdogs criticized Atlanta-based Equifax on Friday for its offer of a package of credit and identity theft protection services in the wake of a giant data breach, because of fine print they say could limit consumers’ recourse in the event of dispute.

Consumer groups say a clause in the terms of use bind them to arbitration, giving away consumers’ right to a trial.

On Thursday, Equifax reported a breach exposed the personal information, including Social Security numbers, of 143 million U.S. consumers. In response, the company said it would provide a free one-year package of credit monitoring and ID protection, which CEO Rick Smith called an unprecedented step.

The terms of use for the TrustedID Premier service said “all claims, disputes, or controversies raised” by consumers or the company “shall be finally settled by arbitration.”

“By consenting to submit your claims to arbitration, you will be forfeiting your right to bring or participate in any class action,” the terms state.

Many consumer groups worry that clause meant victims of the hack couldn’t sue or join a class-action case against Equifax for the cyber breach.

In a statement, Equifax disputed that. The company said the arbitration clause and waiver for class action cases “applies to the free credit file monitoring and identity theft protection products, and not the cybersecurity incident.”

Corporations in many industries have pushed to move disputes with customers to arbitration rather than the courts.

Lawsuits are costly, take longer and in many cases, businesses have an upper hand outside the traditional justice system, an investigation by The New York Times found.

Consumer Watchdog of California said in a news release that the offer may violate California law, and asked the state’s attorney general, Xavier Becerra, to investigate.

Eric Sneiderman, the New York attorney general, called the clauses “unacceptable and unenforceable,” on Twitter. He later said, after Equifax released a statement to clarify that the terms do not apply to the cyber-attack, that his office is “continuing to closely review” the situation.

Liz Coyle of Georgia Watch, a consumer advocacy group, said the clauses are buried in fine print few will read in a time of distress.

“Nobody reads the fine print. It’s really outrageous,” she said.

MYAJC.COM: REAL JOURNALISM. REAL LOCAL IMPACT.

AJC Business reporter J. Scott Trubey keeps you updated on the latest news about economic development and commercial real estate in metro Atlanta and beyond. You'll find more on myAJC.com, including these stories:

Never miss a minute of what's happening in local business news. Subscribe to myAJC.com.



Reader Comments ...


Next Up in Business

Delta ending discount for NRA members
Delta ending discount for NRA members

Delta Air Lines announced Saturday it is ending a discount for National Rifle Association members. Atlanta-based Delta said it is ending its contract for discounted rates through the airline’s group travel program. “We will be requesting that the NRA remove our information from its website,” Delta said in a written statement...
Should you talk about your pay? Career experts weigh in
Should you talk about your pay? Career experts weigh in

Even with nearly every cultural taboo thrown to the wind− from discussing sexual orientation to politics; one last conversational taboo still exist among Americans − how much we get paid. "These days, it's okay to talk about the troubles we're having with our children or even our marriages," noted one blogger from PayScale...
BB&T recovering after 'technical issue' left customers without access to accounts, cash
BB&T recovering after 'technical issue' left customers without access to accounts, cash

Millions of BB&T customers were locked out of their accounts Thursday night and Friday morning due to an outage that bank officials said was caused by a "technical issue." The interruption of services was first reported Thursday night and appeared to last until just before noon Friday. “At this time, many of our services...
Krog Street Market developer plans redo of aging Atlanta hotel
Krog Street Market developer plans redo of aging Atlanta hotel

The developer of Atlanta’s Krog Street Market plans to convert an aging extended stay hotel in the Piedmont Heights neighborhood of the city into an eclectic boutique hotel. Atlanta-based Paces Properties said it has signed a deal with Texas hotelier Liz Lambert and her Austin-based hospitality company Bunkhouse to retrofit the...
UPS to add new electric delivery trucks to fleet
UPS to add new electric delivery trucks to fleet

UPS plans to deploy 50 electric delivery trucks as part of its fleet of brown vehicles, a move it expects could give a boost to adoption of electric vehicles across the industry. Sandy Springs-based UPS in its Thursday announcement said the trucks – which it is partnering with electric vehicle manufacturer Workhorse Group Inc....
More Stories