UKRAINE – 2021/06/13: This photo illustration shows the Equifax logo on the … [+] screen of a smartphone and computer. (Photo illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
Equifax provides business leaders with timely reminders about corporate crisis communication.
This isn’t the first time a credit scoring company has responded to a crisis.
In 2017, the Equifax data breach compromised the private information of 148 million Americans. It was reported to be one of the largest identity theft cyber crimes.
The Wall Street Journal reported Tuesday that the company sent lenders inaccurate credit scores on millions of consumers earlier this year, leading to higher interest rates and declining consumer applications.
Statement From Equifax
In a statement on its website, Equifax blamed the situation on “a coding issue in a legacy, on-premise server environment in the US that is slated to be migrated to the new Equifax cloud infrastructure. This issue, which occurred over a period of several weeks, resulted in the possible miscalculation of certain attributes used in model calculations. See the article : The 988 healthcare provider hopes it will reduce suicide. Credit reports were not modified due to this issue.” .
The company said: “We know that businesses and consumers depend on our data, and Equifax takes this technology coding issue very seriously. We can confirm that the issue has been resolved and that we have conducted analysis with our customers to best meet consumer needs. As part of this extensive analysis, we determined that During the three-week period of the problem, most scores did not shift.For those consumers who did experience a score shift, preliminary analysis indicates that only a small percentage may have received a different credit decision.
Public relations consultants and crisis management experts shared their insights and perspectives on how Equifax responded to the situation.
UKRAINE – 2021/06/13: This photo illustration shows the Equifax logo on the … [+] screen of a smartphone and computer. (Photo illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
‘Numerous Missteps’
“At first glance, Equifax has completely mishandled this situation,” commented Michelle Mastrobattista, founder and marketing strategist at Brand Paradise. “There have been numerous missteps, from the response time to the original WSJ article to apparently knowing about this coding issue since May and not proactively addressing it.”
Demanding Transparency
“There is growing negative sentiment on Equifax’s social media channels. People want them to address the coding issue and be transparent about how many people were affected and how they plan to fix the situation. See the article : Public financial management for an effective response to health emergencies: Key lessons from COVID-19 for balancing flexibility and accountability. Not only have they posted a statement on social media, but it appears that in the last few days social media posts automatically timed and completely tone deaf,” he said.
“If Equifax doesn’t immediately pin the statement to the top of their social media channels, the negative comments below each post will continue to have greater reach and impact. Posting the statement would allow them to contain most of the comments below this thread, which will reduce virality. If not, every time there will be a new negative comment on another post, everyone who likes those posts will be notified,” Mastrobattista predicted.
Empathy Needed
“Americans are already dealing with rising consumer prices, record inflation and the constant fear of an impending recession. See the article : UK Catholic aid agency calls for more action against ‘food crisis’. Now more than ever, people need to feel strong trust in their financial institutions and agencies,” said Matt Weaver, senior vice president of public relations firm Actual Agency, via email.
“Equifax should have led with empathy here, rather than relying on the technical side of the bug. I expect a growing public backlash in the coming days, requiring the company to publicly retract its initial response,” he speculated.
A Forced Response
“One of the cornerstones of crisis response is truth and transparency, it’s important to admit mistakes and take responsibility for actions, quickly and efficiently providing opportunities and resources to affected people,” advised Ronn Torossian, founder and chairman of the board of crisis resolution. public relations agency 5WPR via email.
Don’t Wait
“It’s frustrating that Equifax waited until the report about these errors was released, forcing them to finally act, instead of being first alerted to the coding issue. Even if they were working with individual lenders, they should have issued a public statement. What’s even more frightening is that they continue to hide vital information such as specific dates or how users will know if they were among those who received false information from their users,” he noted.
“Other companies can learn from Equifax’s response that if you choose to come out with the truth as transparency from the first moment you are made aware of a problem, you can better control the narrative. Don’t let others write your business history for you,” concluded Torossian.
