equifax banner that reads 'data breach'

Equifax, one of the largest credit reporting agencies in the country, has finally reached a settlement with the Federal Trade Commission, the Consumer Financial Protection Bureau, and 48 US states and territories. This settlement was the result of a class-action lawsuit that resulted from Equifax’s gross mishandling of consumer data back in 2017. In the Equifax Data Breach Settlement, Equifax has agreed to pay up to $700 million in restitution and varies penalties.

The cyber security breach that occurred around May 2017 has exposed the personal information of around 147 million people. Among the personal information that was stolen are names, addresses, credit card numbers, birth dates, social security numbers, and in some cases, even driver licenses. To learn more about the data breach and how you can protect yourself from identify theft, click here.

The Settlement

Equifax has agreed to pay at least $575 million, and potentially up to $700 million, in restitution and penalties for failing to secure the data of millions of consumers. Of that $575 million, Equifax has agreed to set up $300 million in a restitution fund for affected consumers that includes free credit monitoring or identity monitoring services. If that doesn’t adequately cover the losses, the company also agrees to add an additional $125 million. Equifax will also pay $175 million to 48 US states and territories and $100 million in civil penalties to the Consumer Financial Protection Bureau.

Find Out If You Were Affected by the Breach

In this article, we want to focus on the consumer compensation component of the settlement.  If you were affected, the Equifax Data Breach Settlement lists numerous ways in which you can be compensated for the mishandling of your personal data.

First, you need to confirm that your personal data was affected by the breach. Click here to determine if you are eligible for compensation.  This website is maintained by the 3rd party involved with the settlement, so don’t be alarmed if you aren’t directed to the Equifax website.

But because you will need to provide your last name and last six digits of your social security number, we want to emphasize that THIS is the only legitimate website to investigate this issue.  Sadly, there have already been numerous cases of fake data phishing websites that are scamming people into providing their personal data.  Do not let yourself be victimized by visiting the wrong website.  We have provided safe links to the correct website throughout this article.

Filing a Claim

If you are eligible to make a claim, you have three options:

A $125 Cash Payment

If you already have credit monitoring services that will continue for at least six more months, you are eligible for a cash payment up to $125. However, if you choose to go this route, the actual cash payment you will receive may be much less than $125. Remember that the actual restitution fund for consumer compensation in the Equifax data breach settlement is anywhere between $300 million to $425 million. If we take the best-case scenario, using $425 million as our compensation fund, and divide that by the proposed cash payout of $125, you are left with 3.4 million. This means that the entire consumer restitution fund will be depleted after only 3.4 million people choose the $125 cash payment. That’s only 2.3% of the entire population of 147 million that was affected by the breach. We think it’s safe to say that more than 2.3% of the affected consumer population will opt for the $125 cash payment. If you decide to go this route, be prepared to receive far less than $125 in restitution.

10 Years of Free Credit Monitoring Services

If you are eligible for the free credit monitoring service, our advice is to take this option instead of the cash payout. You are guaranteed at least four years of three-bureau credit monitoring offered through Experian, with the option to add another six more years of one-bureau credit monitoring through Equifax. Credit monitoring services like these can cost anywhere between $10 to $30 a month. If you multiply that across ten years of service, you would be looking at $1,200 to $3,600 worth of credit monitoring services given to you for free. Financially, we believe it makes more sense to choose the free credit monitoring services instead of the cash payout.

Other Cash Payments

If the Equifax data breach caused you to become the victim of fraud or identity theft, you might be entitled to even more compensation. You could be eligible to receive up to $20,000 for:

  • Time spent remedying fraud, identity theft, or misuse of your personal information. You may qualify for any personal time spent solving one of these problems for up to 20 hours at $25 per hour.
  • Any Out-of-Pocket losses resulting from the breach. This may or may not include professional fees, fees related to unauthorized charges to your accounts, costs of freezing a credit report, costs of Equifax credit monitoring services up to a year prior to the breach, and expenses for postage, mileage, notary, or any other related services.

If this involves you, all details made in the claim will need to be proven with supporting documentation. To see what documentation you will need, click here.

At First Financial Consulting, we take our responsibility to our clients very seriously.  This includes our own policies for safeguarding client information. We have a strict privacy policy and a commitment to help clients when they have been exposed to outright fraud or to the unscrupulous sales tactics from those who claim to have your best interests in mind. If we can be of any assistance with investigating the Equifax data breach, or in reviewing financial products you’ve been sold, please give us a call or send an email.  We’re here to help.  We truly provide objective advice you can trust.

626-844-4630