Former Equifax chief apologizes to Congress over hack

WASHINGTON (Reuters) – The former head of Equifax Inc (EFX.N) apologized repeatedly on Tuesday at a congressional hearing for the theft of millions of people’s personal data in a hacking breach, saying it took weeks for the credit bureau to understand the extent of the intrusion.

Richard Smith retired last week but the 57-year-old executive led the company over the time of the hack, which Equifax acknowledged in early September.

Late on Monday, Equifax said an independent review had increased the estimate of potentially affected U.S. consumers by 2.5 million to 145.5 million.

In March, the U.S. Department of Homeland Security alerted Equifax to an online gap in security but the company did nothing, said Smith.

“The vulnerability remained in an Equifax web application much longer than it should have,” Smith said. “I am here today to apologize to the American people myself.”

Equifax keeps a trove of consumer data for banks and other creditors who want to know whether a customer is likely to default.

Former Republican Senator Saxby Chambliss checks his watch as he and City of Pasadena Councilmember Steve Madison stand with Richard Smith, former chairman and CEO of Equifax Inc., prior to Smith’s testimony before House Energy and Commerce hearing on “Oversight of the Equifax Data Breach: Answers for Consumers” on Capitol Hill in Washington, U.S., October 3, 2017. REUTERS/Kevin Lamarque

Smith said both technology and human error opened the company’s system to the cyber hack, which has been a calamity for Equifax, costing it about a quarter of its stock market value and leading several top executives to depart.

A company employee failed to tell the information team a software vulnerability that hackers could exploit should be fixed, Smith said. Then, a later system scan did not uncover the weak point.

Slideshow (3 Images)

Smith said he was notified on July 31 that “suspicious activity had occurred,” after security personnel had already disabled the web application and shut down the hacking. He said he only learned in the middle of August the scope of the stolen data.

On Aug. 2, the company alerted the Federal Bureau of Investigation and retained a law firm and consulting firm to provide advice. Smith notified the board’s lead director on Aug. 22.

That timing could help lift suspicions that three executives who sold stock on the first two days of August illegally used insider knowledge of the hack. Smith said the three “honorable men” did not know about the breach at that time.

Smith deferred to the FBI on questions of whether the hack had been sponsored by a nation-state.

“It’s possible,” he said when asked if the hackers were from another country.

Writing by Lisa Lambert and Patrick Rucker; Editing by Clive McKeef and Bill Rigby

Our Standards:The Thomson Reuters Trust Principles.

Tech

Former Equifax chief will face questions from U.S. Congress over hack

WASHINGTON (Reuters) – U.S. lawmakers are due to question the former head of Equifax Inc (EFX.N) at a Tuesday hearing that could shed light on how hackers accessed the personal data of more than 140 million consumers.

Richard Smith retired last week but the 57-year-old executive will answer for the breach that the credit bureau acknowledged in early September.

Late Monday, Equifax said an independent review had boosted the number of potentially affected U.S. consumers by 2.5 million to 145.5 million.

In March, the U.S. Homeland Security Department alerted Equifax to an online gap in security but the company did nothing, said Smith.

“The vulnerability remained in an Equifax web application much longer than it should have,” Smith said in remarks prepared for delivery on Tuesday. “I am here today to apologize to the American people myself.”

Smith will face the House Energy and Commerce Committee on Tuesday but there will be three more such hearings this week.

Equifax keeps a trove of consumer data for banks and other creditors who want to know whether a customer is likely to default.

The cyber-hack has been a calamity for Equifax which has lost roughly a quarter of its stock market value and seen several top executives step down alongside Smith.

Smith’s replacement, Paulino do Rego Barros Jr., has also apologized for the hack and said the company will help customers freeze their credit records and monitor any misuse.

There has been a public outcry about the breech but no more than 3.0 percent of consumers have frozen their credit reports, according to research firm Gartner, Inc.

Smith said hackers tapped sensitive information between mid-May and late-July.

Security personnel noticed suspicious activity on July 29 and disabled web application a day later, ending the hacking, Smith said. He said he was alerted the following day, but was not aware of the scope of the stolen data.

On Aug. 2, the company alerted the FBI and retained a law firm and consulting firm to provide advice. Smith notified the board’s lead director on Aug. 22.

Patrick Rucker contributed from Washington; editing by Clive McKeef.

Our Standards:The Thomson Reuters Trust Principles.

Tech

Former Vodafone boss backs India’s music-streaming service Saavn as it hits 18M users

Saavn-Logo

Mumbai-based music-streaming service Saavn announced Thursday that former Vodafone chief executive Arun Sarin has joined as an investor and strategic advisor.

The news comes less than three months after the company announced $ 100 million in fresh funding. At the time, it said it was adding one million new users per month, with 14 million in total.

As of today, that number has grown to 18 million monthly active users, which it says represents a tenfold increase in daily active users in India since last year.

Beyond that, it’s claiming more than 20 million songs (over 250 million streams per month) and a global team of 145 people across five offices.

“Music streaming is a core app on today’s smartphones, and Saavn is superbly positioned to grow rapidly in the fast expanding smartphone market in India,” Sarin said in a statement.

“As an innovative and nimble music-streaming company, at the heart of one of the world’s most valuable markets, Saavn hits all the right notes,” he added.

Meanwhile, the company’s cofounder and chief executive, Rishi Malhotra, said that over 90 percent of the service’s usage is driven by smartphones, and that it plans to “work more deeply with carriers in India and additional territories” in the coming months.

Sarin’s investment amount was not disclosed.

The company’s most recent series C round in July was led by New York-based hedge fund Tiger Global Management, and at the time it said that it expects to hit 20 million users by the end of the year.

But while the service may be the market leader on its home turf in India, it certainly has its work cut out if it hopes to expand globally — an area in which Sarin’s expertise will no doubt help. That said, the company did not make any mention of expansion plans today.

In general, the music-streaming space has been busy.

Earlier this week, we reported that Deezer is planning an IPO later this year as the battle with rivals Spotify and Apple Music heats up. And Google Play Music continues to expand with its official entry into Japan a few weeks ago.

Microsoft’s Groove Music just announced support on Sonos speakers, and Spotify hasn’t managed to keep out of headlines either: On Wednesday it launched its new “Mix Mates” playlist generator to help friends find music they share in common. (We also heard rumors that Spotify will be supported on Google’s upcoming second-generation Chromecast.)

The announcements from Saavn today are encouraging, but it’s only just the beginning of the global music-streaming wars — and versus many of the other big players, its user numbers are still relatively low.

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