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What business leaders can learn from Equifax's response to the latest crisis

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Equifax provides timely reminders to business executives on how to communicate about corporate crises.

This isn’t the first time a credit scoring company has responded to a crisis.

In 2017, the Equifax data breach occurred, compromising the personal records of 148 million Americans. He is reported to be one of the biggest cybercrime related to identity theft.

of wall street journal reported on Tuesday that the company sent lenders inaccurate credit scores to millions of consumers earlier this year. This led to higher interest rates and rejected consumer applications.

Statement from Equifax

In a statement on its website, Equifax blames the situation on “a coding issue within its legacy US on-premises server environment that it plans to migrate to its new Equifax cloud infrastructure.” Over the course of several weeks, this issue could cause certain attributes used in model calculations to be calculated incorrectly. No credit report changes were made as a result of this issue. ”

The company said: You can be assured that the issue has been fixed and that we are working closely with you on the analysis to best meet consumer needs. As part of this extensive analysis, we determined that most scores were unchanged during his 3-week period in question. For consumers who experienced score changes, initial analysis indicates that only a minority of consumers may have received different credit decisions. ”

Public relations consultants and crisis management experts shared their insights and perspectives on how Equifax responded to the situation.

“Many Mistakes”

“On the face of it, Equifax has handled this situation completely wrong,” commented Michelle Mastrobattista, founder and marketing strategist at Brand Paradise. “There have been many missteps, from her original response time to her WSJ article to her apparent failure to recognize and proactively address this coding issue since May.”

Demand for transparency

“There is a lot of negative sentiment on Equifax’s social media channels. Not only have they not posted a statement on social media, but their social posts over the past few days have been automatically scheduled and seem to have fallen completely on deaf ears.

“If Equifax doesn’t immediately pin a statement to the top of its social media channels, negative comments will continue below every post and have more reach and influence. Otherwise, every time there is a new negative comment on another post, everyone who likes those posts will be notified. will,” predicted Mastrobattista.

need empathy

“Americans are already dealing with rising prices of consumer goods, record inflation and a constant fear of impending recession,” said Matt Weaver, senior vice president of public relations firm Actual Agency. In an e-mail, he said he needed to feel more trust in financial institutions and agents than ever before.

“Equifax needed to lead with empathy here rather than relying on the technical side of the error. It will be necessary to do so,” he speculated.

forced response

“One of the pillars of any crisis response is truth and transparency. It is important to admit mistakes and take responsibility for our actions while providing options and resources to those affected quickly and efficiently. ” by email to the 5WPR public relations agency.

don’t wait

“It’s disappointing that Equifax was ultimately forced to take action by waiting until reports of mistakes were released rather than when they were first warned of coding problems. Even so, they should have issued an official statement. It continues to withhold important information from users.

“What other companies can learn from Equifax’s response is that they have better control over their narratives if they choose to publicly tell the truth as transparency from the moment they are first alerted to the problem. Don’t let people write your business resume,” concludes Torossian.