FTC on Equifax settlement: Take credit monitoring over cash
The US Federal Trade Commission (FTC) on Wednesday advised people impacted by the 2017 Equifax breach to apply for 10 years of free credit monitoring instead of a cash payout, because it is unclear how much money they would get if they pick the latter, but due to the high number of requests it seems likely that it will be way less than the $125 that was initially estimated.
Last month, Equifax agreed to pay a minimum of $575 million, and potentially up to $700 million as part of a settlement with the Federal Trade Commission, the Consumer Financial Protection Bureau (CFPB), 48 states, the District of Columbia and Puerto Rico. The amount to be paid will consists of $175 million to 50 US states and territories; $100 million to the CFPB; and at least $300 million for a fund to provide credit monitoring services to people affected by the breach. If this amount proves insufficient, the firm will add up to $125 million to the fund.
People impacted by the breach can choose to receive 10 years of free credit monitoring or a cash payment of an estimated $125. However, a fixed amount $31 million has been allocated for the cash payments, which means that that money will be divided over the number of applicants, with a max payout of $125 per individual. The FTC explained that “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.” The FTC therefore urges people to choose free credit monitoring instead. People who have already applied for a cash payout can still switch to the credit monitoring option.