In September 2017 Equifax had a massive data breach that exposed the personal information of about 147 million Americans, and last week a settlement was finally reached with the Federal Trade Commission.
If you’re one of the people who was impacted by this (nearly half of Americans were) you’re entitled to either free credit monitoring or some cash as part of the settlement.
What’s really odd is that the FTC said that the choice was either 10 years of free credit monitoring or $125. As I covered in the post, that didn’t really make much sense.
Usually in settlements like this there’s some amount of money distributed among those who were impacted, but given that we’re talking about a finite sum of money, I couldn’t figure out how they arrived at the amount of $125. Presumably the payout would be based on how many people take part in requesting compensation.
There was a lot of interest in this. Heck, Alexandria Ocasio-Cortez even Tweeted telling people to get their check from Equifax.
Well, the FTC has now clarified that you’re not getting anywhere close to $125 if you were involved in the Equifax data breach.
The FTC has provided an update regarding this, as follows:
5. I thought I could choose $125 instead of free credit monitoring. What happened?
The public response to the settlement has been overwhelming. Millions of people have visited this site in just the first week. Because the total amount available for these alternative payments is $31 million, each person who takes the money option is going to get a very small amount. Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed.
The free credit monitoring provides a much better value, and everyone whose information was exposed can take advantage of it. If your information was exposed in the data breach, and you file a valid claim before the deadline, you are guaranteed at least four years of free monitoring at all three credit bureaus (Equifax, Experian, and TransUnion) and $1,000,000 of identity theft insurance, among other benefits. The market value of this product is hundreds of dollars per year.
You can still choose the cash option on the claim form, but you will be disappointed with the amount you receive and you won’t get the free credit monitoring.
So they have a total of $31 million to distribute, and that will likely be distributed across millions of people (if not tens of millions of people). So I imagine we can expect anywhere from a less than a dollar to a few dollars at most, and that’s it.
But I still can’t wrap my head around what they were thinking. The whole answer from the FTC seems like an odd tone for a government organization to take.
So if there’s $31 million to distribute and each person were to receive $125, that leaves under 250,000 people. Did they really think that just 0.16% of people would take part in this, especially with the promise of $125 to people impacted?
So what’s going to happen sounds in line with what I would have expected all along, though can anyone make sense of what they were thinking?