There has been a lot of reporting in the media about the major Equifax settlement of claims brought by the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB) and all but two of the states’ Attorneys General related to the avoidable 2017 data breach in which personal data on more than 147 million people was stolen.  The personal information included the names, dates of birth and Social Security numbers of 147 million people putting them in serious danger of identity theft for the rest of their lives.  Unfortunately, much of the reporting, most notably that everyone will be getting $125 is not accurate.

Here is what the agreement actually provides for:

1.  Free credit monitoring for four years at all three credit bureaus, Equifax, Experian and TransUnion and six more years of free credit monitoring at just Equifax or if you already have credit monitoring, which we all should have, you can choose to receive $125.
2. Additional cash payments of as much as $20.000 for expenses you paid out of pocket in response to the Equifax data breach.  These reimbursement payments are intended to cover data breach related payments made by you such as the costs of freezing and unfreezing your accounts (which until last September cost between $3 and $12 each time you froze and unfroze your credit reports; since September 21st federal law removed all charges for freezing and unfreezing your credit reports), credit monitoring and fees paid to accountants or lawyers related to the data breach.
3. Payments related to the time you spent dealing with the data breach at a rate of $25 per hour.  If your claim is for ten hours or less, you are required to describe the actions you took, such as freezing your credit reports at each of the three credit reporting agencies and the time that you spent on these activities.  If your claim is for more than ten hours, in addition to describing what you did, you must also provide copies of documents showing that you were a victim of identity theft or other problems related to misuse of your information.
4. Seven years of free access to assistance through identity theft restoration services in the event that you do become a victim of identity theft.
5. Beginning next year, you can get seven free credit reports each year for seven years from Equifax.  Federal law  already provides that you can get one free credit report  annually from each of the three major credit reporting agencies so now you can receive, upon request seven free credit reports from Equifax which you should spread out throughout the year as well as the single credit report per year from Experian and TransUnion.

Now for what is really going to happen.

While reports of the settlement have proclaimed that Equifax will be paying 700 million dollars to settle the claims against it brought by the various federal agencies and states’ Attorneys General, that number is extremely misleading.  Only 425 million dollars of that amount is earmarked for the benefit of consumers and only 31 million dollars of that amount is allocated toward the $125 cash payments.  The remaining 394 million dollars allocated toward consumers goes toward paying for the cost of the credit monitoring provided for in the settlement and the reimbursement payments, which most likely will be small for just about everyone.  In addition, once $125 payments total the allocated 31 million dollars, the payments will proportionately reduce.  Therefore it is important for you to file a claim as soon as possible in order to receive the full $125.

TIPS

The first step to take is to find out if you were one of the 147 million people affected by the data breach and therefore eligible to apply for benefits under the settlement.  Here is a link to the section of the settlement website to input your information to determine if you were a part of the data breach.  https://eligibility.equifaxbreachsettlement.com/en/eligibility

If you were affected by the data breach, here is the link to the part of the settlement website where you can file a claim.   All claims must be filed no later than January 22, 2020, however, I urge you to file a claim as soon as possible.  While no payments will be sent until after the settlement receives judicial approval, which is expected in December, it is still important to file your claim as soon as possible.  https://www.equifaxbreachsettlement.com/file-a-claim

If you choose to receive free credit monitoring, once the settlement has been approved by the court and your claim has been approved, you will receive an activation code and instructions by your choice of email or regular mail.  Cash payments will be made by check or debit card sent by mail once the settlement and your claim have been approved.  The date for court approval of the settlement is December 19, 2019.

If you wish to opt out of the settlement and sue Equifax on your own, you must do so by filing a request for exclusion by mail no later than November 19, 2019.  However, I cannot imagine any situations where it would be worth your while to do so.  One reason for this is that another aspect of this data breach that has been hardly reported on is that in the two years since the data breach occurred none of the data stolen in the data breach has been put up for sale on the Dark Web, that part of the Internet where criminals buy and sell goods and services.  Generally, following data breaches, the information is promptly marketed on the Dark Web by criminals seeking to capitalize on the information as soon as possible to maximize profits.  To date, it appears that none of the information stolen in the Equifax data breach has been sold on the Dark Web nor have there been reports of identity theft occurring attributable to the stolen information leading many experts, myself included, to conclude that similar to the 2015 massive data breach at the federal Office of Personnel Management, this data breach may well be the work of the Chinese government which does such activities as a part of intelligence gathering and not for profit.  Regardless of who committed this particular data breach, the danger to you of data breaches and resulting identity theft are tremendous and you should take action to protect yourself including, most prominently freezing your credit reports at each of the three major credit reporting agencies.

As further developments occur in regard to the Equifax settlement, I will report them to you.

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