It wasn’t the first, and it won’t be the last. The 2017 Equifax data breach has already been followed by at least a dozen other hacks, some greater in scale. Still, a major breach of a trusted financial institution has a unique ability to capture people’s attention.
One of the Big Three credit reporting agencies, Equifax is also the oldest. The hack of Equifax servers revealed the credit card and driver’s license info, birthdates, Social Security numbers, and addresses of nearly 150 million people. The potential for direct impact to so many people’s wallets and finances renewed questions about privacy, from the universal to the personal: How can we protect our data in a digital age? Whose data has been compromised? What should I do now?
The Equifax Payout
If you’re among the 147 million people whose data was exposed during the breach, you are eligible for a share of the Equifax settlement. The Federal Trade Commission (FTC), which oversees credit agencies, said in July that the company agreed to pay at least $575 million and as much as $700 million to compensate victims of the breach.
The lion’s share — $300 million — is earmarked for affected consumers who bought Equifax’s credit monitoring services. Of the remainder, $175 million goes to states and districts, and $100 million goes to civil penalties. The pot of money for general reimbursement to those whose data was compromised without any known fallout: $31 million.
Equifax is offering up to 10 years of free credit monitoring or $125 per claimant. But to get the cash option, you have to have paid for credit monitoring services for the last six months. Even then, the FTC warns that due to the massive public response, that $125 could shrink to “a small amount of money. Nowhere near … $125.”
Go With the Monitoring
Equifax’s second option might not be as immediately appealing as cold, hard cash, but it is probably the better one. To start with, it offers greater market value: four years of credit monitoring from all three credit bureaus (Equifax, Experian, TransUnion) plus another six years of credit monitoring from Equifax alone.
Even if you got the full $125, that’s a fraction of $2,400 — a conservative estimate of out-of-pocket costs for 10 years of credit monitoring (based on Reviews.com research on the best credit monitoring services).
Henry Bagdasarian, executive director of the Identity Management Institute, says consumers should opt for credit monitoring in the Equifax settlement because of the economics, but also because “we need to monitor our information frequently.” A credit monitoring service takes the onus off of you to manually check your reports. If you don’t already monitor your credit, 10 years of free service is a great way to start.
Further data breaches and identity theft scares are inevitable. “Data breaches will continue … it really is up to the consumer to take control of their identity,” says Robert Siciliano, CEO of personal security resource Safr.me and security expert with Porch.com.
While credit monitoring can only alert you after something has happened, “it is a tool to keep the consumer aware,” Siciliano says.
The consumer value in the settlement is that it provides easy entry to credit monitoring. Something we should all be doing anyway. And if nothing else, a free service enables all whose data was compromised to recoup something from the fiasco.
Even if Your Data Wasn’t Breached, Equifax Wants to Make It Up to You
While the FTC claimed Equifax failed to take reasonable steps to secure its network, Equifax denies wrongdoing, and no wrongdoing has been found. Regardless, Equifax wants to repair its reputation and status as an essential credit resource by making it more accessible to go through the company for your credit history. All credit reporting agencies are required by law to give you one free credit report per year. Equifax will bump it up to seven free reports per year for the next seven years for all U.S. consumers.
How to File a Claim
You have until Jan. 22, 2020, to be part of the class-action settlement. Keep in mind that the settlement — in whatever form you should choose to take it — will not be disbursed until the federal court has entered a final judgment, potentially several months from now. When it happens, the judgment will be posted with the settlement site’s important documents.
Find out if you are eligible to file a claim by searching your name and last six digits of your Social Security number on the Equifax Data Breach official settlement website. (Beware of phony settlement websites.)
- If your data was impacted, you’re eligible to file a claim and receive either $125 or free credit monitoring for four to six years.
- If your data was impacted and you paid for Equifax credit or identity monitoring services in the year leading up to the breach, you’re eligible for 25% reimbursement.
- If you experienced identity theft or fraud, you’re eligible for seven years of free identity restoration services.
- If the breach resulted in your loss of time or money as you worked to remedy identity theft, you’re eligible for reimbursement up to $20,000.