A brief guide to the Equifax settlement — and how to get what you’re owed

Two years ago, credit reporting agency Equifax suffered an enormous security breach. Hackers gained access to the personal data of 147 million Americans: Social Security numbers, credit card details, and other sensitive information. Almost half the U.S. population was affected.

Recently, Equifax reached a settlement agreement with the Federal Trade Commission to provide compensation for those impacted by the data breach. The FTC has posted summary details at its website. And if you're a real masochist, you can read the entire text of the settlement via PDF.

Over the past week, there have been a lot of stories going around that everyone is entitled to $125 due to the Equifax settlement. Here, for instance, is one of my real-life Facebook friends excited at the possibility of free money.

Equifax settlement conversation on Facebook

On Friday, one U.S. Representative tweeted: “Everyone: go get your check from Equifax! $125 is a nice chunk of change. Get that money and pay off a bill, sock it away, take a day off, treat yourself, whatever you'd like.” And at Slate, one author wrote that you have a moral obligation to claim money in the settlement.

I'll admit: Even I believed I was going to get $125. I told Kim about it so that she could get her $125 too.

But being a skeptic by nature, I've been digging a little deeper. Turns out things with the Equifax settlement are a little more complicated than “everyone gets $125”. In fact, most people won't (or shouldn't) get any money.

What the Equifax Settlement Provides

The Equifax settlement contains a number of provisions based on how badly an individual was affected by the data breach.

If your identity was actually stolen, for instance, and you suffered real financial losses because of it, then you're entitled to a cash payment of up to $20,000. If you had to spend time dealing with the data breach, you're entitled to $25 per hour (up to 20 hours). The catch? You can't just say you suffered losses. You have to provide proof. (If you spent less than 10 hours dealing with the issue, no real proof is required.)

If your identity was not stolen as a result of the Equifax data breach, then there are one of two possible outcomes.

  • If you do not currently have a credit monitoring service, then you're entitled to receive ten years of free credit monitoring: four years at all three major credit bureaus (Equifax, Experian, and TransUnion) followed by six years of Equifax-only monitoring. (If you were a minor in May 2017, you get 18 years of free credit monitoring.)
  • If you do currently pay for credit monitoring, you can either switch to the free credit monitoring or opt for “alternative reimbursement” of up to $125.

It's this latter provision that everybody is writing about. “Get your free $125!” the headlines shout. But it's not as simple as that.

For one, this money is only meant for folks who already pay for credit monitoring services. Yes, I know. Plenty of people — probably millions — will lie about this in order to get a claim at that cash. But that doesn't make it right.

But there's another, more important point.

This $125 compensation isn't guaranteed. It's up to $125 compensation. What the fine print actually says is that there's a $31,000,000 pool set aside for the “alternative compensation” portion of the program. That's enough to pay 248,000 people $125 each. If more than 248,000 file claims for alternative compensation, then everyone gets less.

Equifax settlement conversation on Twitter

Don't believe me? You can find this info on page 36 of the court order or item 10 of the official settlement FAQ (“What if I already have credit monitoring or identity protection services?”). My guess is that in the end, folks who opt for payment in the Equifax settlement will get very little money. And that's largely because people who weren't actually affected will have filed in the hopes of getting free money.

Here's another thing you should know. For most people, opting to take the $125 is a dumb choice — even if they're actually eligible for the cash and not lying about it.

Ten years of free credit monitoring is worth far more than $125!

These services typically cost about $25 per month. Taking the ten years of free credit monitoring is worth about $3000. Last I checked, $3000 is far more than $125.

[Update: As commenters have noted, credit monitoring might cost this much but it's not necessarily worth this much. Fair enough. I stand by the main point though. $125 amortized over ten years is about $1 per month. Credit monitoring is worth at least $1 month, right?]

How to Get What You're Owed

After all that, how can you get what you're owed? U.S. government websites are always awesome and useful, and this time is no different. The official FTC Equifax data breach settlement page has all the info you need.

That page will route you to the Equifax data breach settlement website where you can check your eligibility (i.e., whether or not your data was compromised) and file a claim. It took me all of two minutes to complete the forms and request my ten years of credit monitoring. Once the case settles (probably sometime in late January), I'll get info on how to access the service!

Kim, on the other hand, may actually be entitled to a real, cash settlement. She had issues with identity theft right around the time of the data breach. I don't know how we prove that these problems were due to the data breach, but if she's kept her records, she could indeed receive cash as part of the Equifax settlement.

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Jess @ Wired Titan
Jess @ Wired Titan
10 months ago

I didn’t feel any impact from the breach. But I’m sure if I dig up something long enough, I could find an something. Starting the billable clock now!

Brett
Brett
10 months ago

I’m not a big fan of credit monitoring services and say take the money. I think if you go and look back on what the best recommendations were when this whole thing went down, it would be to have your credit frozen. Getting credit monitoring services (even free) provided by the same organizations which created all of this in the first place is ridiculous. NOTHING will be restitution for this and I will be looking over my shoulder for issues from the data breach my whole life. $5,000 is asking price, not the value provided by credit monitoring.

RichardP
RichardP
10 months ago
Reply to  Brett

Exactly! It’s not realistic to say that the credit monitoring is “worth” $3000.

A lot of credit monitoring services (maybe most) are like medical insurance from a bad provider: you pay each month and then, when you file a claim, they fight you on it.

Jen From Boston
Jen From Boston
9 months ago
Reply to  RichardP

I asked for the cash. At least 2 of my credit cards and my credit union already monitor my credit for free. So check if that’s a free benefit already for you before getting the credit monitoring.

HR
HR
9 months ago

Same here. My bank and 2 credit card companies provide the service for free.

Andrew
Andrew
10 months ago
Reply to  Brett

I put in the claim for the money as well. I happened to be one of the individuals affected by the OPM hack that happened a few years before the equifax breach so I’m already getting identity theft / credit monitoring as compensation. Not like I need a redundant service on top of it.

Eurobubba
Eurobubba
10 months ago

You write, “Taking the ten years of free credit monitoring is worth about $3000.” I’d take issue with that. Ten years of credit monitoring from Equifax may currently *cost* $3000; whether it’s *worth* that for any given individual is another matter. Personally my sense is that I get a lot more value out of various other services that cost less — of course I might feel differently if my identity were actually stolen.

Shaun
Shaun
10 months ago

“My guess is that in the end, folks who opt for payment in the Equifax settlement will get very little money. And that’s largely because people who weren’t actually affected will have filed in the hopes of getting free money.” People applying for the cash who were not affected will have no impact on the size of the award affected people get. There is an online tool at Equifax’s website that can determine if you were affected by the breach. If you were not affected, you are not eligible. Therefore, it’s quite reasonable to assume that the company will verify… Read more »

S.G.
S.G.
10 months ago

I’m unclear: is the credit monitoring through Equifax, or is Equifax facilitating for a third party.

I, too, was part of the OPM breach. Research into the monitoring service they offered demonstrated that it was through a third party Chinese company. Ironic, but I decided against providing them with my personal details just in case the Chinese government doesn’t already has everything.

Tonya
Tonya
10 months ago

So my question is by taking the cash or credit monitoring, do we void our right to sue if we are compromised?

GJ
GJ
10 months ago
Reply to  Tonya

That is my understanding that you are giving up that option, yes.

Phillip
Phillip
10 months ago

I took the monitoring service. I figure when all is said and done, I might get $25 if I asked for the cash. Although I get a certain amount of “free” monitoring from Credit Karma (I get email notifications when there’s a credit check or a new credit card application) I would like to suspect whatever they offer will be at least as good. Maybe not. Either way, I don’t expect to get much.

GJ
GJ
10 months ago

Since my husband and I have both of our names on any lines of credit, mortgage, etc. I’m wondering if we should “hedge our bets” so to speak and take the free credit monitoring for one of us and have the other take the alternative payment.

Any thoughts on this? Thanks!

Cindy in South
Cindy in South
10 months ago

I signed up for the 10 years of credit monitoring, I put my info in and it said I was affected. Now I find out about the Capital One breach and I have a credit card through them….it is never ending…sigh.

SkillfulWealth
SkillfulWealth
10 months ago

Thank you for the explanation. I actually went to equifax today to “claim” the credit and I chose the credit monitoring for a different reason. Let’s say one day you are taking out a home loan and your credit is impaired because of fraudulent activity. The $125 option that you may take instead of the monitoring would be equal to an eight of a point in your interest rate for one year of interest on a 100,000 loan. Given that you are likely to get dinged by more than 1/8 of a point for bad credit and your loan will… Read more »

Chelsea Avirett
Chelsea Avirett
10 months ago

Even if your identity wasn’t stolen, you’re eligible to be compensated ($25/hour) for the time you spent doing preventative tasks like signing up for a credit freeze or suspending that credit freeze. I’m not sure if there’s a cap on the amount of compensation Equifax is required to pay out there.

Deborah
Deborah
9 months ago

So…how does all this affect those of us who have freezes on our credit files? I initiated freezes with all three credit bureaus as soon as the law required them to become free (believe it was last October). While Equifax indicated that my data was compromised in the 2017 breach, I didn’t have any suspicious or fraudulent activity between the time of the breach and the freezes being set up. So I don’t think I’m entitled to any money, and I don’t see how credit monitoring is going to help me. Am I missing something?

Carmine
Carmine
9 months ago

In all honesty I have zero confidence in Equifax to provide me a safe and effective credit monitoring service.

Is there any chance there will be a future article comparing credit monitoring options out there, both the free self-service options and the premium ones where you trade money for some measure of peace-of-mind?

Bruce
Bruce
9 months ago

Is there a way for people already with credit monitoring who signed up for the “$125” in the initial excitement to change their choice and choose the 10 years of credit monitoring instead?

Bruce
Bruce
8 months ago
Reply to  J.D. Roth

Appreciates your reply. Just wanted to let you know I received email from Equifax that i can amend my claim to request free credit monitoring instead of alternative compensation.

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