Evaluating the Equifax Settlement – Don’t Spend That $125 so Fast
Evaluating the Equifax Settlement — Don’t Spend That $125 so Fast
September 25, 2019
Do you remember the 2017 Equifax breach where 147 million Americans (almost one out of every two people!) had their personal data exposed to hackers? It caused an uproar at the time, and SWP quickly recommended that everyone should take steps to freeze or lock their credit. Recently, Equifax settled a lawsuit with the Federal Trade Commission to pay up to $700 million as part of the settlement. Sounds promising, right? The devil is in the details.
The Equifax settlement provides for different compensation depending on the extent of your actual damages:
- If your identity was actually stolen and you suffered real financial losses (which must be documented), you may be entitled to up to $20,000 of cash reimbursement.
- If you had to spend time correcting damage caused by the data breach, you are entitled to up to $25/hour for a maximum of 20 hours. However, you may need to provide proof, including bank and credit card statements.
- If your identity wasn’t stolen, but you are one of the 147 million people whose data was breached, you have two options:
- You are entitled to 10 years of free credit monitoring (four years from the three major credit bureaus and an additional six years of Equifax-only monitoring), or
- A cash reimbursement up to $125. However, you are only entitled to a cash reimbursement if you had a credit monitoring service in place at the time of the breach and you verify this by October 15, 2019. If you meet that criteria, don’t get too excited. The $125 payment is not guaranteed. Of the $700 million total settlement, only $31 million is available for this pay-out. So, if all 147 million people file for this benefit, you may receive a whopping $.21. The amount you would receive is dependent on the number of people filing a claim.
So, what do you do? First, you may want to check to see if you were affected by the breach, which you can do here. You have until January 22, 2020, to make a claim on Equifax’s settlement, which you can do here. You can try for a cash settlement, but if you are at all interested in credit monitoring, it may make more sense to request the 10 years of monitoring service. It is easy to argue that 10 years of credit monitoring at an average cost of $10/month is worth more than a possible (and unlikely) $125 one-time payment. Lastly, and most importantly, it is essential to make sure you take all steps possible to prevent identity theft, have your credit freeze in place and practice good “cyber hygiene” (see the SWP blog for more ideas). All in all, this entire Equifax experience has been anything but equitable or easy.
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