First there was the furor that Equifax was hacked, putting millions of confidential consumer records in criminal hands. Next there was the furor about Equifax's response. Now, our in-bred elites are outraged that the IRS would award a sole-source contract to Equifax for, of all things, anti-fraud! Outrageous! Equifax can't protect itself, and now our genius IRS awards them millions of dollars?!
Sadly, this is yet another example of pathetically ignorant people expressing outrage about a perfectly normal and sensible action by the IRS that has nothing to do with Equifax's inexcusable malfeasance in protecting consumer data.
Here's the story in a nutshell.
Equifax
Equifax is one of a handful of companies that gathers and sells information about consumers, much of it confidential. It is a public company that provides an essential service to its customers, which are predominantly credit-granting businesses. The core of their business is receiving detailed transaction data from banks, aggregating it and selling it.
The Equifax breach and follow-ons
As usual with breaches, it happened long before the company became aware of it. Also typically, the company waited a long time before making an announcement. Equifax executives added an extra unsavory twist to the events by selling stock before the breach was announced. The response of Equifax to the event, which included a bogus offer of consumer protection against identity theft, was awful. Extremely little hard-core information about the breach has been released.
With this breach, Equifax joins the ranks of large institutions, private and government, that demonstrate their inability to keep their data assets safe. This is an ongoing scandal for which there are solutions, but none that major institutions care to use. I have written extensively about this.
The IRS contract
The IRS awarded a sole-source contract to Equifax for access to confidential consumer credit data -- exactly the same kind of service that Equifax provides to most of its customers. Public figures were outraged!
If the IRS contracted with Equifax to help apply its expertise to keeping IRS data secure, the outrage might have been justified. But Equifax does not sell those services. What they sell is data, data that the buyer can use for many purposes -- often for credit-worthiness, but sometimes to help verify consumer identity. The data was valuable for this purpose before the breach, and remains valuable today.
The data that was stolen was, of course, a snapshot of what Equifax had at the time of the theft. Since then, data has continued to pour into Equifax, updating and augmenting the data it already had. By using this additional data in special ways, the IRS could improve its ability to prevent identity thieves stealing taxpayer refunds, for example. I have no idea if the IRS will be smart enough to do this (I suspect not), but in any case they need the data! Without it, the IRS will be even more vulnerable to theft and fraud than it already is.
For the Senators to castigate the IRS for buying data from Equifax shows that they don't have a clue about computers and software -- they don't care to know the difference between services and data, for example. But we already knew that.
Clueless about Technology
What this is really about is that most people, including business, government and media elites, are clueless about technology. Which doesn't stop them from pronouncing about it with great confidence. As it turns out, I wrote about before, using the IRS and e-mail to illustrate the hapless opining of public figures about Bitcoin and Blockchain.
When things go wrong, "experts" are called in, and more money is spent doing the same useless things that let the problem happen in the first place. With the side effect that everything is even slower, more error-prone and vulnerable than it is today. The current round of posturing by public figures helps nothing. Sad.