Equifax Data Breach Settlement: Free Credit Monitoring vs. Reduced Claim

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Update. As many of you correctly pointed out, only $31 million was allotted to the $125 alternative payment if you opted out of the free credit monitoring. The FTC has provided an update encouraging people to pick the free monitoring:

I thought I could choose $125 instead of free credit monitoring. What happened?

The public response to the settlement has been overwhelming. Millions of people have visited this site in just the first week. Because the total amount available for these alternative payments is $31 million, each person who takes the money option is going to get a very small amount. Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed.

The free credit monitoring provides a much better value, and everyone whose information was exposed can take advantage of it. If your information was exposed in the data breach, and you file a valid claim before the deadline, you are guaranteed at least four years of free monitoring at all three credit bureaus (Equifax, Experian, and TransUnion) and $1,000,000 of identity theft insurance, among other benefits. The market value of this product is hundreds of dollars per year.

You can still choose the cash option on the claim form, but you will be disappointed with the amount you receive and you won’t get the free credit monitoring.

My perspective is that data breaches are happening all the time. (Capital One was breached just this week.) All of them just say “oh my, we’re sorry, here’s some free credit monitoring”. I’ve probably got about 8 different credit monitoring services going on right now, and I’m sure more will be offered shortly. I do NOT value their free monitoring at some “retail value” of hundreds of dollars. You may feel differently. I think that people should be rightly angry if they end up with a few bucks in the end, which hopefully will spur further change and make future penalties more severe. If all these companies care about is money, then isn’t a huge cash penalty a better deterrent to lazy security practices?

Original post:

Equifax has reached a settlement with the Federal Trade Commission, the Consumer Financial Protection Bureau, and 48 out of 50 states over their huge data breach that was discovered in 2017. You can find full details at FTC.gov, where you can confirm the official claim website. You can check your eligibility at this lookup tool. You will need to provide your last name and last 6 digits of SSN.

First, you can get up to 10 years of free credit monitoring or $125 if you decide not to enroll because you already have credit monitoring. No supporting documentation necessary. I am already using these free daily credit monitoring services and they have been working well for me, so I am definitely filing a claim for the cash payment of $125. However, some people may prefer the monitoring. You can file a claim for every person in your household that is 18 or older.

Next, you can be compensated for the time you spent dealing with the claim, at a rate of $25 per hour up to 20 hours. Supporting documentation requirements vary as follows:

  • If you submit a claim for 10 hours or less, you must describe the actions you took and the time you spent doing those things.
  • If you claim more than 10 hours, you must describe the actions you took AND provide documents that show identity theft, fraud, or other misuse of your information.

If you are the type of person that read this website, you probably did spend at least some amount of time dealing with the data breach. For me, these activities mostly happened near the time the breach was discovered in September 2017.

  • You might have spent time reading press releases and news articles about the data breach and how it might impact your financial life and how to avoid identity theft.
  • You might have spent time reading official websites about all of the many differences between a credit freeze and fraud alert.
  • You might have spent time on the phone or online in order to place and/or removing those credit freezes and fraud alerts.
  • Finally, you probably checked all of your credit reports from all three credit bureaus, probably multiple times, in order to make sure there was no fraudulent activity.

For example, if you spent 5 hours doing this total, you can file a claim for an additional $125 (5 times $25) by listing and attesting to your activities but without having to provide physical documentation.

You can also file claims for direct expenses that you paid as a result of the breach (supporting documentation required), including:

  • Losses from unauthorized charges to your accounts
  • The cost of freezing or unfreezing your credit report
  • The cost of credit monitoring
  • Fees you paid to professionals like an accountant or attorney
  • Other expenses like notary fees, document shipping fees and postage, mileage, and phone charges

As with many such settlements, the final amounts may be reduced depending on the number of people who make a claim.

Finally, starting in 2020, all US consumers can get 6 free credit reports per year for 7 years from the Equifax website. That’s in addition to the one free Equifax report (plus your Experian and TransUnion reports) you can get at AnnualCreditReport.com. You can sign up for an email reminder if you want.

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Comments

  1. I got this:”Based on the information you provided, our records indicate that your personal information was not impacted by this incident. Equifax has worked hard to make the “Am I Impacted” tool as accurate and up-to-date as possible.”

    It seems like bait and switch, initially they did report that I was impacted. It seems like, yeah right, they are going to pay up.

  2. None of my family qualified, but in the beginning they did.

  3. I’m kind of surprised by your post as you strike me as the kind of person who reads the fine print. And the fine print is that no one will receive anything close to $125 or anything else. Some people have projected the number to be as little as 21 cents. Between the size of the settlement and the money skimmed off to individual States who did nothing to protect their consumers, especially Georgia where Equifax is hardhearted, leaves a pool of money so inadequate and so insulting one has to wonder how many people in Congress and Regulators were bought off to sign on to this deal.

    • We’ll just have to see. It will probably take years just to get a check anyway. A reduction is quite possible but I seriously doubt it will turn into 21 cents, as that probably assumes every person eligible files a claim, which is as likely as everyone turning out to vote.

  4. Mike Carson says:

    I spent almost no time dealing with this, so I will claim nothing. But it doesn’t seem fair that this company gathers all of my data and then is negligent on protecting it, and I am not compensated in any way for it

  5. I would add more language hedging on the $125 – it is by no means guaranteed. There are about 143 million people eligible for the settlement and only a few hundred million dollars that Equifax is required to pay out. If more people fill a claim (and articles like this make that more likely), the more likely it is people will get a smaller number than $125. It’s still worth doing in my mind, but people shouldn’t think it’s a guaranteed $125.

    They should definitely certify any hours they spent dealing with this breach, as that provision does require Equifax to kick in another $125m if that fund gets used up.

  6. Thanks for posting about things like this. It’s very valuable information that I don’t receive from any other source.

  7. Graham Weedon says:

    Jonathan, I’m asking this question generally for you and your audience: I am eligible to file a claim, but should I? I haven’t checked my wife’s eligibility, but my point is this: I’m not ‘aware’ of any hassles or hardships related to my data being compromised. My nature is to NOT pile on, but I’d like to know why I should or what I’m missing. I completely understand if I was directly impacted and spent precious time untangling a mess.

    • If you don’t feel you were affected and don’t want to file a claim, then I see nothing wrong with just not filing a claim. It won’t affect the amount of money owed by Equifax, but you would leave more funds for those people that were affected and did spent their time and money dealing with this hack.

      • From the equifax FAQ, it is important to file a claim and either opt in or exclude yourself:

        “If you make a claim under the settlement, or if you do nothing, you will be releasing all of your legal claims relating to the Data Breach against Equifax when the settlement becomes final. By releasing your legal claims, you are giving up the right to file, or to continue to pursue, separate legal claims against or seek further compensation from Equifax for any harm related to the Data Breach—whether or not you are currently aware of those claims.

        Unless you exclude yourself from the settlement (see FAQ 23), all of the decisions by the Court will bind you. That means you will be bound to the terms of the settlement and accompanying court orders, and cannot bring a lawsuit or be part of another lawsuit against Equifax regarding the Data Breach.”

  8. The small print: “If there are more than $31 million claims for Alternative Reimbursement Compensation [i.e. the $125], all payments for Alternative Reimbursement Compensation will be lowered and distributed on a proportional basis.”

    I’d expect about 2 million people to do this, more if advertised well. So I just can’t wait to get my $15. Woohoo.

    • If that is the cap, that is disappointing. But the actionable information remains the same. You file a claim to the best of your abilities, and then you forget about it because it will take a year or years to shake out. One day in a couple of years, you’ll find a check in your mailbox.

  9. I think what’s in everyone’s interest is to file a real Class Action Suit to revoke Equifax’s corporate charter. If this company isn’t a public menace, hasn’t endangered people’s lives and property forever and hasn’t proven itself an unreliable guardian of the public’s information I don’t know who has.

  10. Thanks Jonathan for the relevant info. I signed up for the four plus six year free monitoring. The more press this settlement gets, the lower the payout. So 10 years of free monitoring seemed like a good bet. We’ll see how it turns out.

  11. Am I correct in thinking that Credit Karma or Credit Sesame qualify as a credit monitoring service to meet the terms specified?

    “If you already have some other kind of credit monitoring or protection services, and do not claim the free Credit Monitoring Services available through the settlement, you may file a claim for Alternative Reimbursement Compensation for up to $125. To claim Alternative Reimbursement Compensation you must certify that you have some form of credit monitoring or protection services on the date you submit your claim form and that you will keep those services for a minimum of six (6) months.”

  12. Wow. Wish I knew this before I filed the claim. Can I change my mind and refile taking the free credit monitoring?

    • Yes, you can change your claim, it’s in the next FAQ:

      6. I want to change my claim to get free credit monitoring instead of a cash payment. Can I do that?
      Yes. The settlement administrator will be sending an email to people who already submitted a claim for the alternative cash payment. In that email, you will have the option to:
      1) provide additional information OR
      2) switch to free credit monitoring.

      We will update this page with more information after the email goes out.

  13. Jonathan, do you think filing an objection would be worth the trouble?

    “If you are a Settlement Class Member, you have the right to tell the Court what you think of the settlement. You can object to the settlement if you don’t think it is fair, reasonable, or adequate, and you can give reasons why you think the Court should not approve it.”

  14. When will the checks be mailed out?

  15. i was just on the settlement website. It looks like I can claim for both the 10-year credit monitoring AND the $25/hour for 10 hours of credit research. Is this correct?

  16. Did you hear back from them? My friend who did not spend additional hours got an email. I asked for compensation wrt additional hours and never heard back 🙁

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