The 2017 Equifax hack is still too fresh to be forgotten by the approximate 147 million people who were affected. Names, dates of birth, Social Security numbers, credit and debit card numbers were all part of the data breach.
But even after being an unprecedented and one of a kind hacking incident that affected more than half of the U.S. population, the issue did not affect Equifax to a large degree. In fact, those looking for Equifax data breach settlement were severely disappointed.
Instead, the credit reporting agency continued as though the incident was a mere blip on its radar, which passed without affecting how the company operates or handles the data of its users. Equifax offered half-hearted apologies and made minimal efforts to restore consumers’ faith in its services.
But when a December 2018 report by the Congressional Committee on Oversight and Reform shed further light on the data breach, the tides started to turn against Equifax.
The report outlined that the incident could have been prevented if Equifax had not been negligible to vulnerabilities in its security. The credit reporting company came under fire again. This time, it was to provide compensation to those who had been affected by its actions, or lack thereof.
Now, it may seem like that Equifax has not gone unscathed from the ordeal. The company has recently reached a settlement agreement with the Federal Trade Commission (FTC) that totals $575 million, and has the potential to grow up to $700 million. The Equifax data breach settlement agreement would reimburse affected customers individually on a case to case basis.
Which brings about this question: If you were using Equifax’s credit monitoring services at the time of the hack, what does this settlement mean for you?
Equifax Data Breach Settlement - What’s In It For You?If you had been an Equifax consumer at the time of the data breach, then you can be eligible for up to 10 years of free credit reporting services or $125 in cash as a reimbursement of time spent in the aftermath of the data breach.
Along with that, you would also be reimbursed for any expenses you had to bear as a result of the data breach, such as legal fees, unauthorized charges from your account, and additional credit monitoring services. The limit for reimbursement is capped off at $20,000.
To see if you are eligible to receive free credit reporting services or the cash compensation of up to $125, head to the claims page set up by the FTC. The Equifax data breach settlement details are updated on the page.
After confirming that you are eligible, you can opt for free credit reporting or cash compensation of up to $125. Any expenses that you had to bear as a result of data breach could be filed separately for an amount up to $20,000.
You could also file for free identity restoration services for up to 7 years.
In addition to this, you would also be eligible to receive up to 6 credit reports per year for up to 7 years free of cost.
What Made This Equifax Data Breach Settlement Possible?Thanks to the attorney generals from various states that came together with the FTC and the Consumer Financial Protection Bureau (CFPB), those who had been affected by the hack became eligible to receive reimbursement of up to $20,000 each along with free credit monitoring for up to 10 years or $125 in cash.
As outlined by a press release by the FTC, the proposed Equifax data breach settlement would require the credit reporting company to pay $300 million into a fund that covers affected consumers’ data monitoring free of cost for up to 10 years.
The company will also cover any costs for consumers if they have already paid for another credit monitoring agency’s services, and will provide refunds if they have paid for Equifax’s services. This fund will also cover any additional expenses that resulted out of the hacking incident.
If the $300 million fund is not enough for the settlements, then Equifax would add a further $125 million to it.
In addition to this $300 million + possible $125 million fund, Equifax will pay $175 million to 50 U.S. territories, which includes 48 states, the District of Columbia, as well as Puerto Rico. Along with this, Equifax will also pay $100 million in civil penalties to the CFPB.
At first glance, this Equifax data breach settlement seems like a fitting end to the Equifax saga. The company is not escaping its responsibility and has to pay its dues to the consumers that were harmed due to its negligence.
At the proposed $20,000 limit for consumers that were heavily affected by the breach, as well as the option to avail either free credit reporting or up to $125 in cash, the deal presents itself as a fair compensation for any troubles that Equifax has caused its consumers.
But that is where it gets interesting.
Pay Attention to The DetailsThe Equifax data breach settlement proposal or the resulting funds do not guarantee that consumers will receive a compensation that is equivalent or close to $20,000.
That amount only outlines the limit of compensation for any damages resulting from the data breach, such as identity theft, related legal and logistics fees, and loss of assets. In this case, Equifax would pay the affected consumer with the amount that they are eligible to receive, up to the limit of $20,000.
In case a consumer’s loss is less than $20,000, then they would not receive the whole $20,000. In other words, the big label to this compensation comes with an even bigger “Conditions Apply” stipulation.
That might also seem fair to some, especially those who are focused on receiving free credit reporting or up to $125 in cash. In fact, it could sound so good that they might claim Christmas has come early.
But there’s no such thing as a free lunch.
By using any of the benefits that are outlined in the Equifax data breach settlement agreement, whether it is the compensation in terms of free credit reporting; up to $125 in cash for time spent; or reimbursement for expenses up to $20,000; you forfeit your right to pursue any additional legal action against Equifax.
In other words, you are giving away your rights for future legal proceedings by taking any of these benefits. Even if you change your mind, you cannot lawyer up against Equifax for the data breach. With that being said, you can still go after additional benefits in the extended claim period, which ends by January 22, 2024 (assuming that there is any money left in the compensation fund).
You Might Not Even Receive the Full $125In case the promise of a $125 payday is keeping you glued to the Equifax data breach settlement, it would be prudent to know that you might not even receive the complete $125 right away.
According to Equifax, any cash settlements would only be addressed after January 22, 2020. Furthermore, if the total amount of initial claims for cash compensation exceeds $31 million, then the offered compensation amount will be lowered.
This means that you would not only receive your cash compensation next year, but it might also be for a lower amount than you expected it to be.
Don’t Want to Be a Part of the Settlement? Don’t Just Sit There!If you are thinking that the Equifax data breach settlement doesn’t seem good enough in exchange for compromising your private data, know that you are not alone.
If you were an Equifax consumer and were affected by the data breach, but don’t want to be a part of the settlement agreement and instead need to reserve the right to pursue legal action against Equifax in the future, then must actively inform Equifax about it through mail. If you don’t, then your lack of action would be considered as your agreement to forfeit your right for any future legal proceedings against Equifax for the data breach.
At this point, it all depends on how you look at this settlement. If the $700 million that is being spent by Equifax sounds like a fair way to repent on the company’s part, then it’s a win for consumers. But if the affected consumers only receive free credit reporting, up to $125 in cash or up to $20,000 in expenses seems too low in exchange for private information, then it is not so much of a reason to celebrate.
The Equifax data breach settlement might sound like good news, but it is in fact a disappointing end to an already bleak situation for many consumers.