Tag Archives: Experian

The Cost Of A Data Breach – T-Mobile May Fire Experian

T-Mobile and Experian both announced that an Experian database containing credit application data for prospective T-Mobile customers (people who applied to finance a new phone or new phone service) between September 2013 and September 2015 was accessed by hackers.  T-Mobile outsources their credit application process to Experian, which is typical, and that is where the breach was.

The data that was compromised included name, address, social, driver’s license, date of birth and additional, unspecified information.  No credit card or bank information was compromised.

First the punch line and then the rest of the story.

T-Mobile CEO John Legere, who is known for speaking his mind, said that T-Mobile is “instituting a thorough review of our relationship with Experian”.  Does this mean that they are going to fire Experian as a vendor?  Certainly possible, but not a given.  There are only 3 major credit bureaus to choose from, but they could pick someone who is NOT a bureau to manage the process and store the data.  Or they could bring it in-house.

In addition, reading between the lines, T-Mobile had a cyber incident response plan and that included providing credit monitoring to the customers who’s data was stolen.  That credit monitoring was through ProtectMyID.com, a division of Experian.  Unfortunately for T-Mobile’s PR department, the company that caused the negative PR (Experian) is the company that T-Mobile set up as the Go-To company to make up for the negative PR.

Legere almost immediately Tweeted that “I hear you re: Experian as service protection option.  I am moving as fast as possible to get an alternative in place by tomorrow.” [ Note: the tomorrow he referred to is today].

So at a minimum, it is likely that T-Mobile will “fire” Experian as their credit monitoring service.

Some thoughts about  the situation:

  • Breaches are pretty much inevitable these days.  What you want to do is minimize, mitigate and manage it.
  • T-Mobile/Experian moved quickly in announcing the breach.  If the breach was closed on September 16, 2015 and they announced the breach on October 1, 2015, that is only a two week window to plan their response.  This means that they must have had their incident response plan already set up.
  • It is unfortunate that their incident response plan included credit protection services from the source of the breach.  That is hard to plan for.  Perhaps it would have been better to use someone who was not already a vendor.
  • Regarding minimizing the breach effects, why did they keep two years worth of history.  It would seem like after they made the credit decision, they could have discarded the data in 30 days.  What you don’t have can’t be stolen.  Companies seem to love to hoard data.  Sometimes that is not a good plan.
  • Apparently the data was encrypted.  More evidence that encryption is not a silver bullet.  Although they are not saying, the fact that the data was compromised even though it was encrypted means that the hackers had a valid userid and password.
  • Experian has not released any details of the hack and may never release the details.  What they want to do it put this behind them.  I am sure they are doing a post mortem even as I write this and that is where the mitigate part comes in.  I do think they will likely learn from this, whether they share that with us or not.
  • T-Mobile seems to be doing a good job of managing this so far.

What is unclear at this point is whether Experian has lost a large customer completely, partly or can recover the relationship.  It appears for sure that they will lose most if not all of the credit monitoring business.

I don’t expect this to have much negative impact on T-Mobile’s business – stay tuned.

Information for this post came from ITWorld.com and T-Mobile’s web site, T-Mobile.com.

Why Cybersecurity Is An Imperative

I often quote the statistic that Experian promotes that 60 percent of small and medium businesses that suffer a cyber security breach go out of business within 6 months.  That is a pretty sobering number.

However, First Data reports two amazing statistics –

First, they say that 90 percent of the data breaches impact small merchants and second, that 70% of small business owners go out of business within 6 months (see article).   The quote, reporting from a convention for independent grocery stores goes on to say that these businesses need to take action now.

Whether either number is exact or not, the number is very high and the risk to the business owner and investors is also very high.

The first step to addressing the problem is to do a risk assessment and see where the biggest exposure is.  And, it is likely you will need to hire a professional to deal with the situation,