Equifax’s CEO Mark BegorPhoto: Mark Wilson (Getty)
Ever the parade-rainer, the Federal Trade Commission announced today that with so many Equifax breach victims opting for cash payments instead of free credit monitoring, each one of them will likely only get “a small amount of money.”
Given the amount of data the company managed to mishandle in 2017, $125 per victim is an absolute pittance of a penalty. On the other hand, massive firms like Equifax often emerge completely unscathed from such incidents (or pay a fine directly to the U.S. Treasury instead of the people they harmed), so we got pretty worked up over the prospect of an unexpected $125 windfall last week.
You can buy tons of things with $125! Sadly, even this was apparently too good to be true.
In a blog post unambiguously titled “Equifax data breach: Pick free credit monitoring,” the FTC noted that, while it was “delighted that millions of people” filed a claim:
[T]he pot of money that pays for [the cash] part of the settlement is $31 million. 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.
Oh good! For a sense of proportionality here, the Equifax breach affected an estimated 147 million people and the cash settlement pool is $31 million.
You can see how the second number, being smaller, would be pretty tiny if divided by the first number. That’s just math! Less than a buck a person if all claims are filled out and each claimant opts for cash—a net payout of 21 cents, to be exact. And that’s not counting anyone who filed claims for additional losses due to identity theft or other hardship.
The FTC, really pushing this whole credit monitoring thing, notes that we greedy claimants will be given the option to switch our preference to credit monitoring—compiled from the three national credit agencies which, if you’ll recall, includes Equifax, the entire reason we’re in this mess—which the agency estimates “would be hundreds of dollars a year” instead:
For those who have already submitted claims for this cash payment, look for an email from the settlement administrator. They’ll be asking you for the name of the credit monitoring service you already have. Or, if you want to change your mind, you’ll have a chance to switch to the free credit monitoring.
Money? Oh, none for me, thanks. Thank you, Federal Trade Commission, for showing me the light.