In September 2017 Equifax had a massive data breach that exposed the personal information of about 147 million Americans, and several weeks ago 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.
A $125 check from Equifax?!
What’s really odd is that with this settlement, the FTC said that those impacted could get either 10 years of free credit monitoring or $125.
As I covered at the time, that didn’t really make much sense, as they had only $31 million to distribute as this part of the settlement, and surely there would be a lot of people signing up. This is especially true given how much public attention this got, including Alexandria Ocasio-Cortez telling everyone to get their check from Equifax.
Everyone: go get your check from Equifax!
$125 is a nice chunk of change.
Get that money and pay off a bill, sock it away, take a day off, treat yourself, whatever you’d like – but cash 👏🏿 that 👏🏽 check! 👏🏻
— Alexandria Ocasio-Cortez (@AOC) July 26, 2019
So at that point the FTC had to clarify that consumers wouldn’t be getting anywhere close to $125 each. As they explained in FAQs:
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.
Senator Warren wants answers from the FTC
Following this situation, Senator (and Presidential hopeful) Elizabeth Warren has sent a letter to the Inspector General of the FTC, requesting an investigation into the misleading public descriptions of the benefits available to consumers under the Equifax settlement.
In the letter, Warren points out:
- Most references to this benefit during the claims process referred to $125, rather than up to $125; for example, “sign up for free credit monitoring for up to 10 years OR get a cash payment of $125 for credit monitoring you already have,” or “free credit monitoring OR $125 if you decide not to enroll”
- Even the instance that refers to “up to $125” seems to be pulled out of thin air, since that would translate to less than 1% of people signing up; why would they assume so few people would participate?
- Over the course of this claim, the guidance from the FTC has changed, and they’re now recommending people sign-up for credit monitoring due to how small the settlement is likely to be
She finishes her letter by saying the following, along with asking several questions:
The FTC has the authority to investigate and protect the public from unfair or deceptive acts or practices, including deceptive advertising. Unfortunately, it appears as those the agency itself may have misled the American public about the terms of the Equifax settlement and their ability to obtain the full reimbursement to which they are entitled.
I really appreciate this letter on the part of Senator Warren. The FTC really botched this, in my opinion, and I do think the public deserves some answers. Equifax had a huge breach that impacted about half of Americans, and the organization that is supposed to investigate and protect the public screwed up pretty majorly as well.
Now, of course rather conveniently Senator Warren is running for President, and I’m sure this will be a popular letter for her to write. Then again, like her or not, she has long had a record of trying to hold big companies/organizations accountable, so it’s not like this is out of character for her.
Do you think Senator Warren is right to want the FTC investigated over this?