8-KEarnings & ResultsMaterial AgreementsExhibits & Filings

EQUIFAX INC 8-K Report, Material Agreement (Jul 22, 2019)

Filed July 22, 2019For Securities:EFX

Summary

Equifax Inc. (EFX) has entered into a comprehensive settlement agreement addressing the aftermath of its 2017 cybersecurity incident. This agreement, filed on July 22, 2019, resolves a significant class action lawsuit brought by U.S. consumers and investigations by federal and state regulatory bodies, including the FTC, CFPB, and Attorneys General of 48 states. The core of the settlement involves a $380.5 million contribution to a non-reversionary fund for consumer restitution and credit monitoring services, with a potential for an additional $125 million to cover unreimbursed consumer costs if the initial fund is exhausted. Beyond direct consumer compensation, Equifax will pay substantial monetary penalties totaling $180.5 million to the MSAG Group, $100 million to the CFPB, and $10 million to the NYDFS. The company has also committed to enhancing its information security practices, including third-party assessments. While the settlement is expected to be financed through existing credit facilities, it is contingent on court approvals, with preliminary approval anticipated in Q3 2019 and final approval potentially by Q4 2019. The company emphasizes that this settlement does not constitute an admission of fault or liability.

Key Highlights

  • 1Equifax reached a material definitive agreement to resolve the In re: Equifax, Inc. Customer Data Security Breach Litigation and investigations by the FTC, CFPB, 48 State Attorneys General, and NYDFS.
  • 2The company will contribute $380.5 million to a consumer restitution fund for affected individuals, covering unreimbursed costs and offering credit monitoring or alternative compensation.
  • 3An additional $125 million may be contributed to the consumer fund if the initial amount is exhausted for unreimbursed costs.
  • 4Equifax will pay $180.5 million to the MSAG Group, $100 million to the CFPB, and $10 million to the NYDFS in monetary penalties.
  • 5The settlement includes commitments to implement enhanced information security practices, such as third-party assessments.
  • 6The total monetary outlay for consumer restitution and governmental penalties is at least $561 million ($380.5M + $180.5M).
  • 7The settlement is subject to court approval, with preliminary approval expected in Q3 2019 and final approval potentially in Q4 2019.

Frequently Asked Questions

The settlement requires Equifax to contribute a minimum of $380.5 million to a consumer restitution fund and pay $180.5 million to the MSAG Group, $100 million to the CFPB, and $10 million to the NYDFS. This totals at least $671 million in direct payments, not including potential additional contributions to the consumer fund or legal and professional services expenses.

Equifax expects to pay the MSAG Group, CFPB, and NYDFS in the third quarter of 2019. A portion of the consumer restitution fund ($25 million) will be contributed shortly after preliminary court approval (expected Q3 2019), with the remainder of the $380.5 million contributed after final court approval (potentially Q4 2019).

No, this settlement resolves the specific U.S. consumer class action lawsuit and investigations by the FTC, CFPB, MSAG Group, and NYDFS. Other legal proceedings and investigations related to the 2017 incident that are not covered by these agreements remain ongoing.

The company plans to finance these payments using its existing borrowing capacity, including its $1.1 billion five-year unsecured revolving credit facility and its $225 million receivables funding facility.