Credit reporting and monitoring agency Equifax could pay almost $700 million in a class action settlement with the Federal Trade Commission that was announced by the company on July 22.
The proposed settlement comes in response to numerous lawsuits resulting from Equifax’s 2017 cybersecurity lapse, which affected nearly 150 million consumers.
Victims affected by this breach had sensitive personal and financial information, such as bank information, credit accounts, Social Security number and more, exposed.Stolen Credit Cards in Hands of Thief Trying to Use Cards Online without Owner Permission. Online Payments Security and Identity Theft Concept Photo.
“This comprehensive settlement is a positive step for U.S. consumers and Equifax as we move forward from the 2017 cybersecurity incident and focus on our transformation investments in technology and security as a leading data, analytics, and technology company,” said Equifax Chief Executive Officer, Mark W. Begor, in a statement. “The consumer fund of up to $425 million that we are announcing today reinforces our commitment to putting consumers first and safeguarding their data — and reflects the seriousness with which we take this matter.”
Here’s the breakdown of how the proposed class action settlement will be distributed, pending approval by a federal judge. After filing a claim, victims will:
- Receive four years of free credit monitoring and identity production from all three credit bureaus (Equifax, Experian, and Transunion) OR one $125 cash payment if the customer already has credit monitoring services through at least six more months.
- Be eligible for at least 7 years of free identity restoration services if they have been impacted by identity theft or fraud.
- Be able to apply for other cash payments (capped at $20,000) for the time spent fixing identity theft consequences, out-of-pocket losses from the data breach and up to 25 percent of the cost of Equifax credit or identity monitoring.
Victims should adjust their expectations, though, in terms of financial compensation: The steps outlined require a long paper trail and numerous steps to demonstrate the harm caused by the Equifax security breach.
First, large settlements for “out-of-pocket” costs due to a security breach are rare, according to CNBC, because it can be difficult to show direct proof of how a financial loss happened based on a data breach. Victims will need to have paperwork documenting the loss, or they will need to prove how much time was spent on fixing their financial accounts and filing disputes. Many people just do not document that type of activity and it is required to get the kind of large settlements promised in the potential agreement.
A judge will decide on the terms of the proposed class action settlement between Equifax and the FTC within the next six months. If you want to keep up with the progress of the case, visit the official Equifax Breach Settlement website or call the toll-free number (833) 759-2982.