Equifax security breach settlement: What does it mean for your business?

Consumers affected by the Equifax security breach of 2017 are poised to benefit from a $425 million settlement agreement reached by the credit bureau, the Federal Trade Commission, the Consumer Financial Protection Bureau and each of the 50 states. Much of the Equifax breach settlement news has focused on what the breach means for personal financial information but business owners also have reason to be concerned.  

Why business owners should care about the Equifax security breach

The recent settlement focuses on the estimated 145.5 million consumers impacted by the Equifax data breach. A separate class action lawsuit filed on behalf of small businesses is currently winding its way through the court system. 

If that case reaches the same eventual conclusion as the one that was recently settled, business owners could see a financial payout. But more importantly than that, there are several other reasons businesses should be vigilant about their credit following the breach.

1. Businesses aren’t immune from identity theft and fraud

Running a business can make dodging identity theft doubly challenging because not only do you have to protect your personal information, you also have to protect your business details. If any of your data is compromised, be it your Social Security number or Employer Identification Number, an identity thief could use that to open phony accounts or establish fraudulent lines of credit in your name. 

That could hurt your personal and business credit scores which might make it harder to qualify for vendor trade lines or business loans. Growing your business could become more difficult if you’re not able to get access to financing because of fraud-related credit score damage. 

2. Business credit reports don’t have the same protections as consumer reports

Your business credit report includes a rundown of your business’s borrowing and payment history. In that respect, it’s no different from your personal credit report but there’s a caveat: anyone can pull your business credit report at any time. 

While you can freeze personal credit reports, business credit reports aren’t subject to the same rules. Unrestricted access to your business credit history could potentially heighten your risk of becoming an identity theft target. 

3. Fraudulent transactions may increase

Even if your personal or business information wasn’t compromised in the breach, identity thieves could still find ways to work against you. For example, someone could use stolen information to open a fraudulent credit card account and make a purchase from your business. Or, you might see an uptick in fraudulent chargebacks. Either way, these kinds of transactions can hurt your business’s bottom line. 

4. Businesses don’t have the same liability protections for fraud

Federal law limits your liability for fraudulent credit and debit card transactions associated with your personal accounts. Those protections don’t cover business debit or credit cards, however. If an identity thief were to steal your business credit or debit card details you may have to carry the full weight of any fraudulent charges if your card issuer doesn’t extend zero liability protection.

5. Your customers’ data could also be at risk

If a data breach exposes your customers’ personal information, your business reputation could suffer. Customers may choose to avoid businesses that were impacted by a breach if they don’t feel their information is secure. The financial fallout from that could be a drop off in sales or a shrinking customer base. 

Equifax breach: What to do to protect your business credit

If you’re concerned about the Equifax breach or what a subsequent data breach could mean for your business, there are some things you can do to keep your credit as safe as possible. 

Check your business credit reports

Equifax was not required to inform small businesses of the data breach as they were consumers. If you haven’t checked your business credit report since the breach, get a copy of your reports from Equifax, Experian and TransUnion. Then, compare notes across reports to see if there are any errors, suspicious activity or accounts you don’t recognize. 

You might be wondering whether you can get a complimentary business credit report from Equifax in light of the breach. Unfortunately, the answer is no. You’ll pay $99.95 to get a single business credit report from the company. 

Place a fraud alert on business credit files if needed.

While you can’t freeze your business credit report, you can put a fraud alert on your file if your business details were compromised. When you place an alert with one credit bureau, the other two are automatically notified. 

Check your personal credit reports and consider a credit freeze.

You can get a complimentary copy of your personal credit report from each of the three credit bureaus every 12 months or if your report has an error because of fraud or identity theft. You can get those by visiting AnnualCreditReport.com. Thanks to a recent law change, it’s now completely free to freeze your personal credit reports at one or all three bureaus as well. 

Credit report and credit check laws

The most important thing you can do to protect your business credit may simply be knowing your credit rights. To wrap things up, this table summarizes the most important federal laws to know where your credit is concerned:

Credit Law:What It Covers:
Fair Credit
Requires credit reporting agencies to provide you with your credit report and score at your request, correct or delete inaccurate information from your credit file that you successfully dispute, limit disclosure of your credit file and refrain from reporting old credit information past a certain date.
Fair and Accurate Credit
An amendment to the FCRA, FACTA allows you to place a fraud alert on your credit file, request complimentary copies of your credit reports if you’ve been a victim of fraud and request a block on information resulting from identity theft.
Small Business
Credit Protection Act
This bill, introduced in 2018 would require credit bureaus to inform small business owners within 30 days if their nonpublic personal information has been breached and not charge small businesses to receive a copy of their credit reports within 180 days of a breach.

Rebecca Lake

Personal finance writer and small business expert

Rebecca lives on the North Carolina coast with her two children an assorted collection of pets. In addition to freelance writing, she also authors a blog focused on making and saving money.