When the FTC and other government agencies reached a settlement deal with Equifax over its massive data breach, people affected were offered as much as $125 in cash. Now, the FTC is encouraging claimants to choose the free credit monitoring option instead, because there's absolutely no way everyone is getting $125. Apparently, the money earmarked for cash payments is only $31 million -- a tiny fraction of the $700 million settlement all the parties agreed on.
There's a separate amount meant to reimburse those who've had to spend money out of pocket due to the data breach. We're talking about people who've had to pay for a credit freeze and other similar measures. But as for the cash payouts, claimants would have to divide $31 million among themselves. The FTC says millions of people already visited the settlement website to make a claim, and it sounds like most people chose to get a payout. Seeing as 147 million US consumers fell victim to the cyberattack that exposed records kept by the oldest of the country's major credit bureaus, claimants might end up getting a few dollars at most.
The commission explained:
"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."
It's not clear why the parties involved only set aside $31 million for cash payments despite knowing how many consumers were affected. As one comment on the FTC's website said: "The court and Equifax knew there were 147 million claimants. Why offer $125 per claim and set aside only $31 million? Did someone forget to do the math?"
In an effort to convince people to opt for free credit monitoring, the FTC wrote that the option is worth a lot more, since its market value is worth hundreds of dollars a year. Based on the settlement website, claimants can get at least 4 years of three-bureau credit monitoring and up to 6 more years of one-bureau credit monitoring at no cost. The commission is even giving people a chance to switch from cash by replying to the settlement administrator's email or by initiating the conversation themselves with an email to info[@]EquifaxBreachSettlement.com.