The Federal Trade Commission said Wednesday that it would likely not be able to make the cash payouts many expected from a settlement with the financial services giant Equifax, which exposed the sensitive personal information of 147 million people in 2017.
Customers who filed a claim via an FTC form were given the option of receiving $125, certifying they had already acquired credit monitoring and waiving their right to sue Equifax, or free credit monitoring for 10 years. Though the settlement between Equifax and the FTC amounted to $700 million, apparently only $31 million—4% of that total—was earmarked for these payouts.
The FTC said it received an “unexpected number of claims” and now warns that the more people opt for the payout, the less money each person will receive from the settlement.
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“The public response to the settlement has been overwhelming,” Robert Schoshinski, an assistant director for the FTC’s Privacy and Identity Protection Division, wrote. “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.”
Schoshinski advised claimants to choose free credit monitoring as recompense.
The fine print of the Equifax settlement, as pointed out by a GitHub developer five days ago on Twitter, dictates that if the claims amount to more than $31 million, the cash amounts “will be lowered and distributed on a proportional basis.” The settlement language states that the claim could be “up to $125.”
The 2017 Equifax breach exposed some of the most valuable information a hacker can steal, inlcuding Social Security numbers, birth dates, addresses, driver's license numbers, and credit card numbers.
Recent weeks have been dark for financial institutions and consumers alike: Capital One disclosed a breach Tuesday that affected more than 100 million people, including the theft of more than one million social security numbers.
The FTC and Equifax did not immediately respond to requests for comment.
