Who doesn’t love free money? But there’s always a catch, isn’t there?
News broke early last week that credit reporting agency Equifax agreed to a $700 million settlement with the Federal Trade Commission as a punishment for a data breach that affected 147 million people.
Included in that settlement was this nugget: $125 free for anyone whose personal data was affected by the breach. The news went viral.
Like most eye-popping class action settlement amounts, it’s important to appreciate the fine print. In this case, there is only enough money for 248,000 people to receive a $125 check. The more people request a settlement check, the smaller the amount each person will get.
In short, if all 147 million people request a cash settlement, they will each receive a check for only 21 cents.
That’s because of the $700 million settlement, $425 million is set aside for affected consumers. Of that, only $31 million is reserved for the $125 payments. The rest will go to other penalties.
So, it does not matter how quickly you signed up for that check. In fact, if you’ve already signed up for it, you may want to discourage other people from doing the same.
While class-action lawsuits do have their advantages, in this case, many consumers may be right in thinking that the federal government went light on a company that rakes in billions of dollars a year.
If you are worrying about waiting in suspense until January, only to receive a check for a few dollars or cents, there are other options available to affected consumers.
The government setup this website, which allows you to enter your name and a portion of your Social Security number to determine whether you qualify. If you do not want the money, you can also accept four years of credit monitoring from all three credit reporting bureaus, Equifax, Experian, and TransUnion. You can then receive another six years of credit monitoring through Equifax. This option is available, no matter how many people sign up.
People who had their identity stolen through the data breach may be eligible to receive up to $20,000 in cash from a different portion of the settlement. This will be difficult to prove, however, and will likely require the help of an experienced consumer protection attorney.