Equifax: investment decisions in crisis moments

Hello, I'm Professor Michael McDonald, today I'd like to talk to you about a unique set of circumstances that have taken place over the last few years involving a company called Equifax. The title of this case study is Equifax Investment Decisions in Crisis Moments.

Equifax is one of the three major consumer credit reporting agencies that are out there. They're a competitor of TransUnion and experian. These credit-rating agencies, firms like Equifax affect most individuals out there, whether they realize it or not. Equifax's whole business is built around collecting, aggregating, and then reporting information about whether an individual like you or I pays their debts or not. They provide this service for hundreds of millions of individuals. Then, businesses pay Equifax for that data. That information that Equifax collected is sought out by businesses who are looking to make credit or loan decisions; for instance, banks and credit card companies. So, that's the background on Equifax. But in 2017, something momentous happened to Equifax. Bloomberg and other news sources began reporting that Equifax was hacked by outsiders. Now think about that for a minute. This is a company that collects information on people: their social security numbers, their debt payment histories, what kind of credit information they have out there, all of their different expenses on an ongoing basis, at least all of the ones that Equifax can get information about. They've got tremendous information about every individual out there and they've put it together in this big dataset. Well, if that information is gained by hackers, there's no telling what kind of trouble they could do. This is an enormous problem for Equifax.