After a heated exchange with former Equifax CEO Richard Smith today during a Senate hearing about the company’s leak of data for millions of consumers, Sen. Elizabeth Warren, D-Mass., told ABC News she believes consumers should have more control over their personal information.
Warren expressed frustration that credit monitoring companies like Equifax seem to profit from data breaches, which often lead consumers to sign up for additional protections, some of which cost money, to prevent future fraud.
During the Senate Banking Committee’s hearing Wednesday, Warren asked Smith, who resigned late last month, whether Equifax’s profits had risen since 2013, over which time it has disclosed four data breaches.
“Yes, senator,” he responded.
The IRS recently gave Equifax a $7 million contract to help prevent fraud despite the breach that exposed more than 100 million individuals’ data, announced this summer.
“They’re just raking in the money, even when they let your information get stolen,” she said. “That’s not right.”
Warren introduced a bill in mid-September that would allow individuals to choose when banks, credit card companies and other creditors are allowed to share their personal information, like their social security numbers. She proposes a system that would work like a spigot: turn it on when consumers are, for example, applying for a mortgage and need to share credit information, and then turn it off when those processes are complete.
“You ought to be able to do that for free, you ought to be able to do that at any of the credit reporting companies and you ought to be able to do it forever,” Warren said.
Smith said during the hearing that Equifax will be rolling out its own version of what Warren is proposing, a service in which consumers can lock and unlock their data, by January 31st.
Warren also said credit ratings companies, which charge for products that help consumers monitor fraud, and executives should not be excused when fraud happens.
“I think we need to say there’s an automatic penalty against the company if the data gets stolen,” she told ABC News. “That way the company has a real reason to keep that data protected.”
Smith suggested solutions to cut down on data breaches that included encouraging consumers to sign up for the new lock/unlock service at the end of the year and that the government should create a replacement for the Social Security Number as the “touchstone for identity verification” in the U.S.
Warren said his solutions were not enough.
“His suggestions are don’t make us pay for it and let us keep doing business as usual,” she countered. “And business as usual isn’t working.”
During the hearing, Smith defended Equifax, saying the monitoring business only accounts for a small portion of their services.
“Roughly 90 percent of everything we do is helping banks and others make informed decisions about lending money to consumers,” he said. “Monitoring is a very small piece of what we do.”