Equifax Settlement Payouts Will Be Less Than Originally Projected, FTC Says

Due to overwhelming interest from claimants, the Equifax data breach class action settlement will reportedly be paying out significantly less than $125, according to the Federal Trade Commission.

When the credit bureau announced their $380.5 million settlement to resolve data breach claims, the cash award from the settlement was estimated to be $125 per claimant. However, an unexpected number of consumers have already filed claims for cash payments with the settlement, which will reportedly cause individual payments to be reduced.

According to the Federal Trade Commission (FTC), the interest in the settlement was “overwhelming” and “unexpected”. Only $31 million of the settlement fund was set aside for cash payments, so the payout per claimants has reportedly dropped significantly lower than $125.

“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,” wrote assistant director of the FTC’s Division of Privacy and Identity Protection Robert Schoshinski in a blog post.

Consumers can still claim the cash payment option. However, these payments will likely be far smaller than they initially expected. The FTC says that credit monitoring may be a better value option for claimants opposed to a reduced cash payment and no credit monitoring.

“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,” Schoskinski wrote.

The Equifax data breach occurred in September 2017 and affected an estimated 147 million people, making it the largest data breach of personal and financial information in American history.

Consumers filed an Equifax class action lawsuit against the credit bureau in November 2017, claiming that Equifax failed in their duty to protect sensitive information. The credit bureau faced similar Equifax class action lawsuits in state and federal courts around the country.

Equifax reached a data breach settlement with consumers in July 2019. Under the settlement, Equifax agreed to pay $380.5 million to pay court costs, attorneys’ fees, service awards, claimant cash payments, and expense reimbursements. If this amount is not enough to compensate claimants for documented expenses, Equifax has agreed to pay an additional $125 million to cover these out-of-pocket expenses. Under the Equifax class action settlement, the credit bureau has also set aside money to pay civil penalties and resolve individual consumer lawsuits.

In order to receive a cash payment or credit monitoring from the Equifax class action settlement, Class Members need to file a valid claim by Jan. 22, 2020.

Settlement Class Members are represented by Amy Keller of DiCello Levitt Gutzler LLC, Kenneth Canfield of Doffermyre Shields Canfield & Knowles LLC, and Norman Siegel of Stueve Siegel Hanson LLP.

The Equifax Data Breach Class Action Lawsuit is In re: Equifax Inc. Customer Data Security Breach Litigation, Case No. 1:17-MD-2800, in the U.S. District Court for the Northern District of Georgia.

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