The Federal Trade Commission (FTC) encouraged people to opt for free credit monitoring rather than making claims for cash in the Equifax security breach settlement.
What We Know:
- Individuals affected by the 2017 Equifax security breach are eligible to file claims for their losses up to $20,000. Claims for the time spent dealing with the breach valued at $25 an hour and existing members of a credit monitoring security program can claim $125 by simply signing up for the settlement on their website. Additionally, Equifax is offering a free credit monitoring and data protection program to those who do not already have it.
- The FTC reported Wednesday that “millions of people” have made settlement claims. It’s estimated that 147 million people’s personal information was exposed in the breach. While all 147 million affected individuals can receive the offered free credit monitoring, there is indeed a limit to the amount of money the company can offer in settlement claims; The company will only pay $31 million in claims, meaning many people won’t actually receive the full $125 they submitted for.
- Due to this high demand and likely disappointing return, the FTC is encouraging affected individuals to opt for the free credit monitoring instead of the cash settlement. “Frankly, the free credit monitoring is worth a lot more – the market value would be hundreds of dollars a year,” the FTC wrote in their report. The monitoring also comes with up to $1 million in identity theft insurance and individualized identity restoration services.
- Those who have already submitted claims for cash payment can still switch to the free credit monitoring, although there is still money available for people who can verify they paid money out of pocket for costly security precautions (like freezing and unfreezing credit accounts or hiring professionals to recover from identity theft) to recover from the breach; The pool of money allocated for these types of reimbursements is much larger because these claims can reach up to $20,000 each.
Equifax did agree to contribute an additional $125 million if the overall settlement fund ran low, but it is not stipulated that the company must regenerate the allotted $31 million fund for the $125 cash payouts.
