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Equifax’s Former CEO Admits the Company Continues to Pursue “Legally Viable” Forced Arbitration

October 04,2017
Washington, DC — Appearing before the Senate Committee on Banking, Housing, and Urban Affairs today, former Equifax Chairman and CEO Richard F. Smith admitted that since it’s a “legally viable path,” the company still pursues forced arbitration. This admission comes just weeks after Equifax abruptly removed the forced arbitration clause, after massive public outcry, that prevented victims of Equifax’s recent date breach from pursuing justice in court. These efforts to strip consumers of their rights could be stopped altogether if the U.S. Senate were to allow the Consumer Financial Protection Bureau’s (CFPB) forced arbitration rule to go into effect.

“The fact that Equifax is still imposing forced arbitration on its customers, even after their data breach fiasco, further proves why we need to uphold the CFPB rule,” said American Association for Justice CEO Linda Lipsen. “Shame on Equifax for trying to push consumers into forced arbitration after enduring the largest data breach in U.S. history, but it shouldn’t be legal for Equifax to try such a move in the first place.”

Last month it was revealed that 143 million consumers (roughly 40% of all Americans) had their personal information stolen in a massive data breach. Once it became public that Equifax was trying to steer these victims into forced arbitration, the company quickly withdrew the arbitration clause and blamed its existence on a technical error. Smith’s admission proves that unless the CFPB rule exists, companies like his will continue to use forced arbitration to deny their customers access to justice, putting the American public at the mercy of financial institutions and Wall Street banks.

“We’ve seen that when consumers lose their rights, companies like Equifax and Wells Fargo are going to take advantage of them,” concluded Lipsen. “When banks and credit reporting agencies break the law and rip off their customers, Americans should have the choice as to how to hold the corporation accountable.”

Yesterday, Wells Fargo CEO Tim Sloan appeared in front of the same Senate Committee and repeatedly lied about the corporation’s continued use of forced arbitration, drawing further attention to the need for CFPB’s rule.

Video highlights from today’s hearing:

Sen. Van Hollen questions Equifax: https://www.c-span.org/video/?c4684641/vanhollen

Sen. Heitkamp questions Equifax: https://www.c-span.org/video/?c4684643/heitkamp

Sen. Brown questions Equifax: https://www.c-span.org/video/?c4684651/brown
Peter Knudsen
Phone: 202-944-2853