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House Republicans and Democrats on Tuesday grilled Equifax’s former chief executive over the massive data hack of the personal information of 145 million Americans, calling the company’s response inadequate as consumers struggle to deal with the breach. 

Former Equifax CEO Richard Smith apologized for the compromise of such information as names, addresses, birth dates and Social Security numbers. Smith was the lone witness at the first of several Capitol Hill hearings this week. No current Equifax official testified.

“The criminal hack happened on my watch, and as CEO, I am ultimately responsible, and I take full responsibility,” Smith said. “I am here today to say to each and every person affected by this breach, I am truly and deeply sorry for what happened.”

Democrats favor legislation that they say would establish strong data security standards and prompt notification and relief for consumers when their information is hacked. But Republicans tamped down expectations for any congressional action as this year the GOP-led Congress has rolled back several Obama-era rules affecting businesses and the financial sector.

“Equifax deserves to be shamed in this hearing, but we should also ask what Congress has done, or failed to do, to stop data breaches from occurring,” said Rep. Jan Schakowsky, D-Ill.

Rep. Bob Latta, R-Ohio, the chairman of the subcommittee examining the breach, said there are already laws on the books that require companies to secure sensitive consumer data. He said that hearings before four House and Senate panels this week should run their course before lawmakers make a decision about what to do next.

“The big thing we heard today is it was a very human error on their part,” Latta said.

Timeline of breach

Smith offered a timeline of what went wrong, saying the Department of Homeland Security warned the company on March 8 about the need to patch a particular vulnerability in software used by Equifax and other businesses. The company disseminated that warning by email the next day and requested that applicable personnel install the upgrade. The company’s policy requires the upgrade to occur within 48 hours, but that did not occur. The company’s information security department also ran scans on March 15 that did not pick up the vulnerability.

In late July, data security officials noticed suspicious activity on a website, which Smith said “happens routinely around our business.” He said an internal investigation ensued and he was alerted the next day, but he had no knowledge at that time that consumers’ personal information had been accessed.

Lawmakers pressed Smith about company executives selling stock in the company after the suspicious activity had been detected. On August 1 and 2, Equifax Chief Financial Officer John Gamble and two other executives, Rodolfo Ploder and Joseph Loughran, sold a combined $1.8 million in stock.

Smith described the executives as “honorable men, men of integrity.” He said at that point in time the company was unaware that consumer data had been accessed.

Schakowsky said “for a lot of Americans, that just doesn’t pass the smell test.”

Smith said the full extent of what occurred emerged during a meeting he had with cybersecurity experts and outside counsel on August 17. The board was alerted the following week and the public on September 7, after the company had made plans for how it would try to help consumers respond.

‘Damage control’

The timeline laid out by Smith didn’t satisfy many lawmakers, who accused the company of being too slow.

“I worry that your job today is about damage control. You put a happy face on your firm’s disgraceful actions, and then depart with a golden parachute,” said Ben Ray Lujan, D-N.M. “Unfortunately, if fraudsters destroy my constituent’s savings and financial futures, there’s no golden parachute awaiting them.”

Lawmakers said that at one point Equifax tweeted the wrong link for consumers to check to learn if they were part of the breach.

“Talk about ham-handed responses, this is simply unacceptable,” said Rep. Greg Walden, R-Ore.

Smith said he was disappointed in the rollout of call centers and a website designed to help the people affected by the breach. He said the company has increased its number of customer service representatives and the website has been improved. He said more than 400 million consumers contacted the company in the weeks following the announcement of the breach. He said the company wasn’t prepared for that kind of volume.

Lawmakers said they’re getting scores of calls from constituents concerned that their information was stolen and the potential ramifications in the years ahead. Rep. Ryan Costello, R-Pa., said hundreds of constituents have contacted his office about the company’s response.

“The slow rollout and how poorly it was done. To me, it was just inexcusable,” Costello said.
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Indigenous people under threat from companies seeking to develop their land for agriculture, mining and energy projects will be supported with money and practical help through a major global partnership backed by philanthropic and government funding.

The International Land and Forest Tenure Facility is the first initiative to provide grants to advance the rights of indigenous people to help them protect their forest land and resources.

“Creating mechanisms that allow indigenous peoples and local communities to gain tenure over their land or forests is a key way to tackle climate change and inequality,” said Darren Walker, president of the Ford Foundation, a major backer.

Norway pledges $20 million

The facility won a $20 million pledge from Norway on Tuesday when it was launched at a land rights conference in Stockholm.

Indigenous people and rural communities have customary claims to two thirds of the world’s land but are legally recognized as holding only 10 percent, according to the Rights and Resources Initiative (RRI), a global network.

This has contributed to an increase in conflicts over land in countries rich in tropical forests and natural resources as agribusinesses, mining and energy companies lay claim to indigenous land and forests.

Forests help slow global warming

Forests absorb planet-warming carbon dioxide and when they are degraded or destroyed, the carbon stored in the trees is released into the atmosphere. Deforestation accounts for 10 to 15 percent of carbon emissions worldwide.

If the facility invests at least $10 million a year for its first 10 years, experts project an increase in titled, protected and well-managed community and indigenous tropical forests of more than 40 million hectares (100,000 acres), an area roughly the size of Sweden.

Such efforts would also prevent deforestation of one million hectares and the release of 500 million tons of carbon dioxide and help reduce poverty among indigenous people, the RRI said.

“The Tenure Facility provides a powerful solution to save the world’s forests from the ground up,” said Carin Jämtin, director general of the Swedish International Development Cooperation Agency, another key funder.

Pilot projects

The facility has already provided grants and guidance for pilot projects in Indonesia, Mali, Peru, Cameroon, Liberia and Panama.

A 2015 peace accord that ended Mali’s civil war failed to address land-based conflicts that contributed to the war, said Boubacar Diarra, the project’s coordinator in the West African country.

The facility helped to set up 17 local land commissions to sort through conflicting claims to determine who owns the land, he said.

“These commissions have reduced conflicts by up to a third by working with local villagers and tribal leaders,” Diarra told the Thomson Reuters Foundation.
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The European Union insisted Tuesday that Brexit negotiations with Britain will not move on to the question of future relations until enough progress has been made on divorce issues, such as how much the country’s exit bill should be.

Britain desperately wants talks to move on to future trade and security arrangements but EU Commission President Jean-Claude Juncker said that more needs to be done on the withdrawal issues first.

Juncker told the European Parliament that “we have not made the sufficient progress needed” and the legislators backed him, approving a resolution underscoring the same point with a vote of 557 to 92 with 29 abstentions. It further underscored the unity of the 27 EU nations as they face off with Britain in the talks.

The EU wants London to commit to guaranteeing the rights of EU citizens already in Britain, making sure border posts do not reappear between the U.K.’s Northern Ireland and Ireland itself and pay up for everything it had agreed to while it was a member.

Juncker said “the taxpayers in the EU 27 should not pay for the British decision” to leave, while the bloc’s chief negotiator, Michel Barnier, said “serious differences remain” on how many bills the U.K. still has to settle. Estimates vary widely from 20 billion euros ($27 billion) to over three times that amount.

“Serious rifts remain, especially on the financial settlement,” Barnier said. “We will not pay at 27 what has been decided at 28, it is simple as that.”

The parliamentary resolution called for postponing any move to widen the talks with Britain unless “a major breakthrough” takes place during the fifth round of negotiations in Brussels next week.

Observers said decisive progress was highly unlikely. Tuesday’s moves further dampened hopes that the EU leaders might give the green light to an expansion in the talks at a summit on Oct 19-20.

Many lawmakers were also dismissive of Britain’s Conservative government, which is widely seen as insecure and bumbling.

The head of the biggest party group in the European Parliament called for the sacking of British Foreign Secretary Boris Johnson for stoking confusion over the Brexit talks.

The European People’s Party chairman, Manfred Weber, appealed to Prime Minister Theresa May: “Please sack Johnson, because we need a clear answer who is responsible for the British position.”

Weber turned Henry Kissinger’s famous observation about the many leaders in the EU onto Britain: “Who shall I call in London? Who speaks for the government? Theresa May, Boris Johnson, or even (Brexit negotiator) David Davis?”

Others are speculating that Britain might actually be stalling to make sure that the member states that trade heavily with the U.K. would buckle and concede at the last moment, sowing discord among the 27.

EPP member Tom Vandenkendelaere said the strong backing of the resolution proved differently. “If the Brits they can play their old divide-and-rule game, they’d better think again,” he said.
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After several years of struggling to make a living doing odd jobs in and around his village, 26-year-old Pushkar Singh came to New Delhi from the northern Uttarakhand state three months ago to hunt for a job.

The high school dropout is willing to do anything — cook, work as a security guard, a peon in an office. But not only has he failed to secure a job, he has not even got an interview so far.

“It’s a huge worry, not having work,” said a despondent Singh as he wondered how long he can continue staying with his relatives.

The hopes of young people like Singh had been fueled by Prime Minister Narendra Modi’s promise of creating millions of jobs for the country’s huge young population when he took power in 2014. Optimism rose after India won the tag of the world’s fastest growing economy. 

But the Indian economy has hit a sharp slowdown, leaving tens of thousands of people struggling to find work in mega cities like New Delhi, which are magnets for migrant labor.

The economy clocked a growth rate of 5.7 percent in the April to June quarter, its most sluggish pace in three years.

The bleak number has set alarm bells ringing and raised fears that India could struggle to return to a high growth path.

“It is a cause for concern, the economy has slowed down much more than most had expected,” said D.K. Joshi, Chief Economist at rating agency Crisil in Mumbai.

Reasons for the slowdown

The slowdown has prompted critics to accuse Modi’s government of economic mismanagement.

Most attention has turned to two major measures that have disrupted the economy in the last year. Critics have slammed the government for imposing a currency change last November to flush out illegal cash, saying it slowed down businesses amid massive currency shortages and gave an unnecessary shock to a cash dependent economy.

In July, India implemented a long overdue and widely welcomed tax reform — a goods and services tax (GST) meant to clean up a complex tax regime and make it easier to do business.

But many worry that faulty implementation and multiple tax rates have created confusion for businesses struggling with the new system.

Economists point out that the currency change and GST, coming within months of each other, have made the slowdown sharper and deeper for virtually all sectors of the economy, which had already started losing pace last year.

The impact is evident in the markets of the Indian capital, which are usually the most crowded at this time of the year. It is India’s main festive season, when consumer spending hits a high. But shop owners are disappointed because customers are not opening their wallets easily.

A usually buzzing upmarket area in New Delhi wears a deserted look. Manu Talwar, the owner of a shop selling high-end mobile phones, has been struggling to make a sale in a country counted as the world’s fastest growing smart phone market, where a new device is coveted by an aspirational generation. 

“You can see the market, it does not look like Diwali, the market is so down. Mobiles, accessories, people were crazy about it. As of now, iPhone 8 has launched, but there is no market,” said Talwar.

The government says it is looking for ways to rev up the economy — according to reports, it is considering spending billions of dollars to give investment a push.

Prime Minister Modi, seen as a business-friendly, reformist leader, recently announced the formation of a five-member panel to advise him on economic issues.

At the heart of the challenge is the need for jobs in a country where about 10 million enter the workforce every year. Modi had hoped to give manufacturing a push to create jobs for low-skill labor, but a flagship “Make in India’ program he launched to woo foreign investors has yet to show significant results. And a slowing economy means that jobs are even being lost in several sectors.

“To think of an overall manufacturing push of the kind China gave, or many East Asian economies that we observed in those economies, that does not seem to be a reality in India. There is a lot of ground to cover to reach that level,” said economist Joshi.

Officials are striking an optimistic note, calling the slowdown transitory, but economists warn recovery will be gradual.

That means Pushkar Singh’s hunt for a job and shop owner Manu Talwar’s hopes of the market picking up may not happen anytime soon.
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With more and more consumers shopping online, do brick-and-mortar stores stand a chance?

At least for one pop-up shop in New York City, the future of retail is about embracing digital trends rather than resisting them.

Mastercard and Marie Claire magazine have teamed up to create “The Next Big Thing” concept shop, a pop-up store in SoHo that brings the convenience of online shopping to a physical storefront.

Industry insiders aren’t discounting physical stores just yet.

“I’m a big believer in the physical store and I think when you look at just pure volume of sales, you still see a majority of that happening in a physical environment,” said Stephane Wyper, senior vice president of Internet of Things partnerships and commercialization at Mastercard.

For its part, Mastercard is taking cues from the online world and making transacting as seamless as possible.

“We look at solving for one very key point of friction, which is how do I reduce the amount of time that somebody has to wait and actually go through the checkout process,” Wyper said.

Window-shopping is interpreted literally here, with a touchscreen display built into the store window which lets users get their retail therapy fix any time of day. Passersby can browse, select and pay for clothes without stepping foot inside. Payment is made via an accompanying store app that’s powered by Mastercard.

Inside, fitting rooms also allow for cashless check out and payment via touchscreen mirrors created by Oak Labs.

Technology is allowing brick-and-mortar stores to respond swiftly to ever-changing consumer tastes.

“In the online world where you can track page views, click-throughs, we can track impressions, discoveries, dwell time, and provide that real-time data analytics,” said Phillip Raub, co-founder of b8ta. The retail tech startup was part of the concept shop and had several consumer electronics on display.

Tech startup b8ta uses cameras to measure foot traffic and time spent looking at products. Tabletop tablets display product information and marketing that vendors can change on the fly.

“Physical retail is probably the #1 biggest area of opportunity for brand product and awareness . . . the future really is looking at how do you start monetizing the space and the services that you provide, in addition to the fact that you can purchase products,” said Raub.

Not to be left out is the social experience of shopping.

“This is a playground for women,” said Nancy Berger, publisher of Marie Claire, “It really brings together, in a social way, interesting women so that they can experience this all together. And I think that sense of community is really going to be an important part of this experience.”

The pop-up store runs until Oct. 12 and has hosted several events such as makeovers, food samplings and talks on health and wellness.

By bringing digital convenience and know-how into a physical store, organizers are showcasing a 2.0 version of brick-and-mortar retail.

“It’s really an opportunity, when you look at the Internet of Things and these connected devices, to really leverage those, to really redefine what the physical store could be,” Wyper said.
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Even though gasoline-powered SUVs are what people are buying now, General Motors is betting that electric vehicles will be all the rage in the not-to-distant future.

The Detroit automaker is promising two new EVs on Chevrolet Bolt underpinnings in the next 1 ½ years and more than 20 electric or hydrogen fuel cell vehicles by 2023. The company sees its entire model lineup running on electricity in the future, whether the source is a big battery or a tank full of hydrogen.

“We are far along in our plan to lead the way into that future world,” product development chief Mark Reuss said Monday at a news conference at the GM technical center north of Detroit.

The event was billed as a “sneak peak” into GM’s electric future. The company also pledged to start producing hydrogen fuel cell vehicles for commercial or military use in 2020. And it promised an increase in the number of electric fast-charging stations in the U.S., which now total 1,100 from companies and governments, taking a shot at electric competitor Tesla Inc. by saying the system would not be “walled off” from electric vehicles made by other manufacturers.

Tesla has 951 fast-charging stations globally that can only be used by Tesla owners.

The hastily called event was short on specifics, and it came just a day before the CEO of Ford Motor Co., GM’s prime competitor, was to announce its business plan that likely will include electric and autonomous vehicles as priorities.

The two new GM electrics in the immediate future likely will be SUVs or a sportier car designed to compete with Tesla’s upcoming Model 3 sedan, Reuss said. The Model 3, which is now in the early stages of production, will go hood-to-hood with the Bolt, starting around $35,000 (excluding a $7,500 federal tax credit) with a range of over 200 miles. The Bolt starts at $37,495 excluding the credit.

Behind Reuss and other executives were nine vehicles covered with tarps that the company said were among the 20 to be unveiled by 2023. GM pulled away the tarps on three of them, clay models of low-slung Buick and Cadillac SUVs and a futuristic version of the Bolt that looked like half of an airport control tower glued to the top of a car body. The rest remained covered.

The company wouldn’t allow photographs of the vehicles, and it wouldn’t say if any of the vehicles it showed were the ones coming in the next 18 months.

Reuss said the new vehicles that aren’t built on the Bolt platform will have GM’s next-generation electric architecture, which he said will be more efficient with longer range than the Bolt’s 238 miles. Through August, GM has sold 11,670 Bolts, which is less than 1 percent of GM’s total U.S. sales so far this year.

Reuss promised that the new vehicles will be profitable as people become more accustomed to the advancing technology. “We can’t just flip a switch and make the world go all-electric,” he said.
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U.S. factory activity surged to a more than 13-year high in September amid strong gains in new orders and raw material prices, pointing to underlying strength in the economy even as Hurricanes Harvey and Irma are expected to dent growth in the third quarter.

The economic outlook was also bolstered by other data on Monday showing a rebound in construction spending in August. The acceleration in manufacturing activity and the accompanying increase in prices could harden expectations that the Federal Reserve will raise interest rates in December.

The Institute for Supply Management (ISM) said its index of national factory activity surged to a reading of 60.8 last month, the highest reading since May 2004, from 58.8 in August.

A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12 percent of the U.S. economy. The ISM said Harvey and Irma had caused supply chain and pricing issues in the chemical products sector. There were also concerns about the disruptive impact of the storms in the food, beverage and tobacco products industries.

The hurricanes are expected to chop off as much as six-tenths of a percentage point from gross domestic product growth in the third quarter. Harvey, which pummeled Texas at the end of August, has undercut consumer spending and weighed on industrial production, homebuilding and home sales.

Further weakness is likely after Irma struck Florida in early September, causing widespread power cuts. Manufacturing outside the areas affected by the hurricanes remained strong in September. The ISM survey’s production sub-index rose 1.2 points to a reading of 62.2 in September.

A gauge of new orders jumped to 64.6 in September from 60.3 in August. Factories reported paying more for raw materials, with the survey’s prices paid index surging 9.5 point to 71.5, the highest reading since May 2011.

The dollar rose against the euro after the data. Prices for U.S. Treasuries were trading higher as were stocks on Wall Street.

Construction spending rises

In separate report Monday, the Commerce Department said construction spending rose 0.5 percent to $1.21 trillion. July’s construction outlays were revised sharply down to show a 1.2 percent plunge instead of the previously reported 0.6 percent drop. Construction spending increased 2.5 percent on a year-on-year basis.

The government said Harvey and Irma did not appear to have impacted the construction spending data as the responses from the Texas and Florida areas affected by the storms were “not significantly lower than normal.”

In August, spending on private residential projects increased 0.4 percent, rising for a fourth straight month.

Spending on nonresidential structures increased 0.5 percent, snapping two straight monthly declines.

In the wake of Harvey and Irma, nonresidential construction spending could fall in September. According to the Commerce Department, Texas and Florida accounted for 22 percent of U.S. private nonresidential construction spending in 2016.

Investment in nonresidential structures such as oil and gas wells has been slowing as the boost from recovering oil prices fizzles. Private construction projects spending increased 0.4 percent in August.

Outlays on public construction projects rebounded 0.7 percent in August after slumping 3.3 percent in July. Spending on state and local government construction projects increased 1.1 percent in August. Gains in September are likely to be curbed by the hurricanes.

Texas and Florida accounted for 15 percent of U.S. state-and-locally owned construction spending in 2016, according to the Commerce Department.

Federal government construction spending tumbled 4.7 percent to its lowest level since April 2007.
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The U.S. Supreme Court on Monday refused to consider a bid by Samsung Electronics Co Ltd. to force customers who have filed proposed class-action lawsuits against the company to arbitrate their claims instead of bringing them to court.

The justices left intact a lower court’s ruling that purchasers of certain Galaxy smartphones made by the South Korean electronics company were not bound by a warranty provision that compelled arbitration of customer complaints.

Warranties with arbitration clauses have become common in consumer electronics and other industries. Courts and regulatory agencies increasingly are scrutinizing arbitration agreements that seek to limit options for resolution of future disputes.

The Samsung case involves two smartphone buyers from California who separately filed proposed class-action lawsuits in 2014 over concerns about the products’ performance and resale value.

Neither Daniel Norcia, who owned an Galaxy S4 device, nor Hoai Dang, who owned an SIII, saw the arbitration provisions when they bought the phone because the language was placed deep inside the warranty booklet and not mentioned on the box, according to their legal papers.

The agreement states that all disputes must be resolved through arbitration, and specifically rules out class actions.

Samsung tried to force the customers to arbitrate their claims, but a unanimous three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco denied the request in January. The court said Samsung did not provide proper notice of the arbitration provision and neither customer had expressly consented to be bound by it.

Appealing to the Supreme Court, Samsung noted that the 9th Circuit decided that the warranty was valid except for the arbitration provision. Samsung argued that the 9th Circuit ruling violated a U.S. law called the Federal Arbitration Act that requires arbitration agreements to be treated equally with other contracts.
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