Before Equifax doxed 143 million Americans (but after it had suffered repeated smaller breaches that should have alerted the company to deficiencies in its security), it directed its lobbying body, the Consumer Data Industry Association, to pressure the Consumer Financial Protection Bureau to exempt credit-reporting bureaux from a soon-to-begin rule banning binding arbitration clauses in user agreements.
Equifax took the position that it should be able to confiscate your right to sue the company for injuring you just by making you click through an "agreement." Instead, you'd have to seek reparations through the notoriously business-friendly private courts of America's private arbitration contractors, and would not be able to band together with similarly injured parties (say, 143 million of them) to seek justice.
In one section of the letter, CDIA declares that federal regulators “should exempt from its arbitration rule class action claims against providers of credit monitoring products.” The letter asserted that allowing customers to sue companies “would not serve the public interest or the public good” because it could subject the companies to “extraordinary and draconian civil liability provisions” under current law. In another section of the letter, Equifax’s lobbying group says that a rule blocking companies from forcing their customers to waive class action rights would expose credit agencies “to unmanageable class action liability that could result in full disgorgement of revenues” if companies are found to have illegally harmed their customers.
Equifax’s lobbying group argued against the prohibition even as it acknowledged that a 2015 government study found “that credit reporting constituted one of the four largest product areas for class action relief” for consumers. Consumer groups countered the claims of CDIA and other rule opponents by saying the ability to file suit is necessary to protect Americans’ legal rights.
“The use of forced arbitration clauses has created a closed system where corporations allow court access only when it’s in their interest, where it is functionally impossible for consumers to recover small dollar amounts they are due under law, and where the deterrent effect of class actions has been lost,” wrote the Consumer Federation of America in a 2016 letter to the CFPB.
Equifax Lobbied To Kill Rule Protecting Victims Of Data Breaches
[Alex Kotch/International Business Times]