Equifax finally responds to swirling concerns over consumers’ legal rights
|| Washington Post
Sharp-eyed social media users have combed through the Equifax data breach site’s fine print — and found what they argue is a red flag.
Buried in the terms of service is language that appears to bar those who enroll in an Equifax credit monitoring program from participating in any class-action lawsuits that may arise from the incident. Here’s the relevant passage of the terms of service:
AGREEMENT TO RESOLVE ALL DISPUTES BY BINDING INDIVIDUAL ARBITRATION. PLEASE READ THIS ENTIRE SECTION CAREFULLY BECAUSE IT AFFECTS YOUR LEGAL RIGHTS BY REQUIRING ARBITRATION OF DISPUTES (EXCEPT AS SET FORTH BELOW) AND A WAIVER OF THE ABILITY TO BRING OR PARTICIPATE IN A CLASS ACTION, CLASS ARBITRATION, OR OTHER REPRESENTATIVE ACTION. ARBITRATION PROVIDES A QUICK AND COST EFFECTIVE MECHANISM FOR RESOLVING DISPUTES, BUT YOU SHOULD BE AWARE THAT IT ALSO LIMITS YOUR RIGHTS TO DISCOVERY AND APPEAL.
This language is commonly known in the industry as an “arbitration clause.” In theory, arbitration clauses are meant to streamline the amount of work that’s dumped onto the court system. But the Consumer Financial Protection Bureau concluded in the summer arbitration that clauses do more harm to consumers than good — and the agency put in place a rule to ban them.
“In practice, companies use these clauses to bar groups of consumers from joining to seek justice by vindicating their legal right,” Richard Cordray, the CFPB’s director, told reporters in July, according to my colleague Jonnelle Marte.
Here’s a further look into why the language raised concerns.
Why is arbitration a big deal?
There is already at least one class-action suit brewing against Equifax. Arbitration clauses make it hard if not impossible for consumers to join such suits. Arbitration is weaker than class-action suits, critics say, because it limits consumers’ ability to find facts to support their case, to appeal decisions or to present their case before a jury.
Friday afternoon, New York Attorney General Eric Schneiderman took aim at Equifax’s arbitration clause, tweeting his staff has contacted the company urging it to remove that part of the fine print.
“This language is unacceptable and unenforceable,” the state’s top lawyer said in his tweet. Minutes later, Schneiderman’s office announced a formal probe into the Equifax breach. In a release, the state attorney general’s office said Schneiderman had sent a letter to Equifax asking for more information. Among the questions were whether any consumer information has found its way to the “black market,” according to a person familiar with the investigation.
A spokesperson for Schneiderman declined to comment on whether officials were investigating the sale of company stock by Equifax executives before the discovery of the hack.
So should I register with the Equifax site, or not?
It’s up to you, but you should know going into the process what you’re signing up for. Equifax issued a statement Friday evening apologizing for consumers’ inconvenience and said the arbitration clause and class-action waiver “does not apply to this cybersecurity incident.”
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Were You Hit By The Equifax Security Breach?
|| Refinery 29
“The three credit reporting agencies collect a vast array of personal data from consumers to calculate credit scores, which can determine an individual’s loan-worthiness or the terms of a loan. At a minimum, the accrued information includes Social Security numbers and credit card information that would be nerve-wracking to have stolen.