IRS awards multimillion-dollar fraud-prevention contract to Equifax
IRS awards multimillion-dollar fraud-prevention contract
to Equifax
The no-bid contract was issued last week, as the company
continued facing fallout from its massive security breach.
By STEVEN OVERLY and NANCY SCOLA 10/03/2017 03:52 PM EDT
The IRS will pay Equifax $7.25 million to verify taxpayer
identities and help prevent fraud under a no-bid contract issued last week,
even as lawmakers lash the embattled company about a massive security breach
that exposed personal information of as many as 145.5 million Americans.
A contract award for Equifax's data services was posted
to the Federal Business Opportunities database Sept. 30 — the final day of the fiscal
year. The credit agency will "verify taxpayer identity" and
"assist in ongoing identity verification and validations" at the IRS,
according to the award.
The notice describes the contract as a "sole source
order," meaning Equifax is the only company deemed capable of providing
the service. It says the order was issued to prevent a lapse in identity checks
while officials resolve a dispute over a separate contract.
The IRS and Equifax did not immediately respond to
requests for comment.
Equifax disclosed a cybersecurity breach in September
that potentially compromised the personal information, including Social
Security numbers, of more than 145 million Americans — data that security
experts have described as the crown jewels for identity thieves. The company is
one of three major credit reporting bureaus whose data determine whether
consumers qualify for mortgages, auto loans, credit cards and other financial
commitments.
The company has subsequently taken criticism for issuing
confusing instructions to consumers, which contained language that appeared
aimed at limiting customers' ability to sue, as well as tweeting out a link to
a fake website instead of its own security site. The Justice Department later
opened a criminal investigation into three Equifax executives who sold almost
$1.8 million of their company stock before the breach was publicly disclosed,
Bloomberg has reported.
Former Equifax CEO Richard Smith, who stepped down after
the breach, endured a bipartisan shaming Tuesday at a hearing of a House Energy
and Commerce subcommittee. The full committee's Republican chairman, Greg
Walden of Oregon, proclaimed: "It's like the guards at Fort Knox forgot to
lock the doors."
The IRS, which has suffered its own embarrassing data
breaches as well as a tidal wave of tax-identity fraud, has taken steps to
improve its outdated information technology with the help of $106.4 million
that Congress earmarked for cybersecurity upgrades and identity theft
prevention efforts.
Senate Finance Chairman Orrin Hatch (R-Utah) questioned
the agency's security systems in a letter to IRS Commissioner John Koskinen
last month. Hatch said he was concerned that the IRS lacked the technology
necessary "to safeguard the integrity of our tax administration
system."
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