Equifax can't pay the $125 you expected, and you probably don't want its credit monitoring
The U.S. Federal Trade Commission is informing those affected by the Equifax credit breach that they likely won't get their promised $125, and instead is pushing consumers toward credit monitoring from the same firm that allowed the data to be taken in the first place.
The FTC told those who filed for monetary compensation for the 2017 Equifax breach that they would receive "nowhere near the $125 they could have gotten if there hadn't been such an enormous number of claims filed."
As terms of the settlement, Equifax had set aside $31 million dollars of their $700 million deal to pay out those who opted to take cash, rather than the credit monitoring option. They're now politely suggesting that rather than opting for cash, filers should opt for the credit monitoring service.
"Frankly, the free credit monitoring is worth a lot more - the market value would be hundreds of dollars a year," said the FTC. "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."
If you're reading this, you're probably impacted. Apple's U.S. loan partner for the iPhone Upgrade Program is Citizens Bank — a company that has utilized Equifax in the past.
Those who have already applied to receive the cash option will be required to provide additional information, such as the name of the credit monitoring service they use, to receive their "far less than $125." If they don't want to — or can't — provide that information, they'll be given the option to switch to credit monitoring service.
That $31 million divided by $125 is 248,000 consumers. If only 248,000 consumers applied for the cash, then they'll all get that $125, but looking at social media there are far, far more that have already done so, and the application period is still open.
And that credit monitoring? The "free" credit monitoring service will be provided by Equifax. You know, the company that had their data breached in the first place. And, you can bet that that service won't cost Equifax $125 for the terms of the deal.
It's understandable if a filer is wary to switch to credit monitoring managed by a company that mismanaged their personal information and then took exhaustive steps to keep this information secret for months after it happened.
"Companies that profit from personal information have an extra responsibility to protect and secure that data," said FTC Chairman Joe Simons at the time the settlement was announced. "Equifax failed to take basic steps that may have prevented the breach."
Not everybody is left in the lurch, though. Anyone who had suffered financial burdens due to identity theft because of the Equifax data breach will still receive monetary compensation — as that was set to come out of a separate fund, and not the $31 million set aside for the filers' cash option.