Back in 2017, Equifax revealed that it was impacted by a massive data breach that compromised sensitive information from upwards of 147 million of its customers. And seeing as how Equifax is a large credit reporting agency, the information in question involved names, birth date information, Social Security numbers, driver’s license numbers, and more. Naturally, word of the data breach resulted in a large class-action suit that would ultimately see Equifax agree to pay $700 million in damages.
While the majority of that sum was earmarked for individual states along with a special fund designed to “provide affected consumers with credit monitoring services,” there was also a designated pool of $31 million to be used to pay impacted customers $125. Unfortunately, and not at all surprisingly, the pool simply wasn’t large enough to pay everyone the full payout.
The FTC revealed as much during a press release this past July:
But the pot of money that pays for that part of the settlement is $31 million. A large number of claims for cash instead of credit monitoring means only one thing: each person who takes the money option will wind up only getting a small amount of money. Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed.
The FTC also made a point of encouraging users to opt for free credit monitoring as opposed to the cash payout:
So, if you haven’t submitted your claim yet, think about opting for the free credit monitoring instead. Frankly, the free credit monitoring is worth a lot more – the market value would be hundreds of dollars a year. And this monitoring service is probably stronger and more helpful than any you may have already, because it monitors your credit report at all three nationwide credit reporting agencies, and it comes with up to $1 million in identity theft insurance and individualized identity restoration services.
Fast forward to December and we now have a bit more context as to why consumers will be getting the short end of the stick with respect to compensation. Put simply, attorneys involved in the case will be getting quite a windfall to the tune of $80 million.
So how much cash will consumers actually receive from Equifax? It’s not a certainly just yet, but somewhere in the $7 to $10 range is likely.
As some opined from the beginning, the idea that Equifax would actually give $125 for every claim filed was simply too good to be true.