Just 10 days ago, the Federal Trade Commission unveiled what could be up to a $700 million settlement with Equifax for the credit agency’s role in a data breach that exposed the personal information of 147 million people.
The terms of the deal — the largest-ever settlement for a data breach case — are vast, allowing those affected to file claims for years of free credit monitoring or a $125 payout if their information was stolen. Other provisions gave people the chance to bill Equifax $25 an hour for time spent to resolve any credit issues, or for any money lost due to the breach.
But the FTC on Wednesday warned Americans that their eventual payouts could be far less than those promised figures after an “overwhelming” number of people visited the claims website since the settlement was announced. Now the agency is urging people to instead opt for the free credit monitoring, saying the pool of cash used for the $125 payments is just $31 million total, meaning if too many people choose that option, the payouts will be “nowhere near” the cited figure.
“The public response to the settlement has been overwhelming,” Robert Schoshinski, the assistant director of the FTC’s division of privacy and identity protection, said Wednesday. “But there’s a downside to this unexpected number of claims. A large number of claims for cash instead of credit monitoring means only one thing: Each person who takes the money option will wind up only getting a small amount of money. Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed.”
The FTC notes that anyone who has already filed a claim should soon receive an email from the settlement’s administrator that will allow them to update their information or switch to the free credit monitoring service.
Schoshinski said in his note that in his estimation, the free credit monitoring is “worth a lot more,” probably approaching “hundreds of dollars a year.” Equifax agreed to pay for up to 10 years of free monitoring for anyone affected by the data breach, and The New York Times notes that if every single person affected by the leak signed up for it, it could wind up costing the company more than $2 billion (although that’s unlikely).
“And this monitoring service is probably stronger and more helpful than any you may have already, because it monitors your credit report at all three nationwide credit reporting agencies, and it comes with up to $1 million in identity theft insurance and individualized identity restoration services,” he said.
People posting comments below Schoshinski’s message appeared less than pleased by the news.
“Seems like Equifax is getting off too easy for the mess they made. Again,” one person wrote. “Sounds like negotiators for Equifax out-danced the other side!”
“Did someone forget to do the math?” another said.