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 stolen 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 the reporting that everyone would 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  a payment of up to $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 September of 2018 cost between $3 and $12 each time you froze and unfroze your credit reports; since September 21, 2018 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 this 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.  This means that if even 5% of the people eligible filed for the $125 payment, they each would receive less than $5.

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, so if you are eligible and have not filed your claim yet, you should do so without delay. https://www.equifaxbreachsettlement.com/file-a-claim The settlement received final judicial approval on January 14th so the payments should begin shortly.

If you choose to receive free credit monitoring, now that the settlement has been approved by the court and if 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 and sent by regular mail.

A good question for many people is whether they should have or get identity theft protection services on their own if they accept the free credit monitoring and other services offered through the settlement.  My opinion is that the extensive benefits provided by private identity theft protection services can go far beyond the basic services provided by Equifax in the settlement.  Services such as Dark Web monitoring, credit score monitoring,  Social Security number monitoring and other services that are critical to protecting your identity are nowhere to be found in the services provided by Equifax in the settlement.

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