Equifax payouts could disappoint customers who were expecting $125 checks, feds say

The Federal Trade Commission says so many people have requested cash payouts to compensate for credit monitoring fees from the Equifax data breach settlement that no one will receive much.

From mid-May through July 2017, hackers breached Equifax’s systems and stole customer names, Social Security numbers, birth dates, addresses and some driver’s license numbers. About 147 million people — nearly 45 percent of the U.S. population — had their data exposed and are eligible to apply for part of a the settlement.

The settlement requires the company to give $425 million to affected customers, but only a small subset of that money is reserved for people requesting cash to reimburse them for credit monitoring services. Under the terms of the settlement, they’re entitled to up to $125, but the FTC now says no one should expect to receive that much.

In an announcement earlier this week, the FTC’s assistant director for privacy and identity protection Robert Schoshinski said that of the $700 million settlement, just $31 million is available for cash payouts to people to reimburse them for credit monitoring services.

“The public response to the settlement has been overwhelming... But there’s a downside to this unexpected number of claims,” Schoshinski wrote in a news release. “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.”

Instead, the FTC is recommending people choose free credit monitoring instead of cash payouts because that will have a higher value.

More money is available for people who have had to pay out of pocket because their identity was stolen. People who have paid for credit freezes or help dealing with their identity theft can still submit documents and be reimbursed, Schoshinski said.

As part of the settlement, Equifax also has to pay $175 million in penalties to states and make security improvements. The credit reporting agency also has to pay $100 million in fines to the federal Consumer Financial Protection Bureau.

People can find out if they’re eligible for the settlement online at ftc.gov/Equifax or by calling the settlement administrator at 833-759-2982.

This story was originally published August 2, 2019 at 11:06 AM with the headline "Equifax payouts could disappoint customers who were expecting $125 checks, feds say."