For 147 million Americans whose data was stolen in the Equifax hack in 2017, the prospect of receiving as much as $ 125 in cash was a tempting one.
So enticing, in fact, that a week after the Federal Trade Commission announced the $ 700 million agreement with the credit rating agency, more than 4.5 million people visited the settlement. But Wednesday, the FTC moved to lower expectations, announcing that the payouts would be "nowhere near" $ 125, given the volume of interest and the $ 31 million payout pool. "Every person who takes the money option will liquidate only a small amount," wrote the FTC.
Although the settlement clearly stated that individual payments could be lower, the FTC's announcement was quickly criticized by privacy and consumer advocacy groups who claim that creditors should receive money if they preferred it to the second option: 10 years of free credit monitoring. In fact, high demand, critics said, is an argument for pursuing a higher settlement.
A FTC spokesman said the $ 31 million reimbursement pool was part of the class action settlement the agency adopted in its Equifax order. But the agency looked at the credit monitoring option "as the main source of relief for affected consumers" because it was the "best source for future identity theft protection." (Equifax referred questions about the settlement to federal and state regulators.)  "The alternative to obtaining a refund for alternative credit monitoring, originally described in the class action settlement, was never intended to be a cash payment for all affected consumers," the FTC said.
When parties negotiate a settlement amount, which typically involves assessing how many claims can be expected, and therefore the amount that will be sufficient, said Marc Rotenberg, president and CEO of the Electronic Privacy Information Center, a non- biased research organization. Rotenberg said "it's a little skewed" if the parties first thought $ 125 would be available to consumers, but "now have to run around saying: & # 39; Look at the fine print. & # 39;"
"I don't think this is typical. I think it's ironic," said Rotenberg. "The FTC typically investigates companies that bury information in lowercase." Robert Weissman, president of Public Citizen, a nonprofit group for consumer advocates, said there should be more oversight of how companies – including credit monitoring companies – collect and protect consumer data.
The Equifax case "highlights the challenges of having legal remedies these circumstances, ”Weissman said. "The unlimited corporate monitoring that underpins the business model of so many companies is really problematic."
Consumers have a few options. They may make claims for free credit monitoring or a cash payment; these options do not require documentation. But if the victims spent time recovering from the hacking or lost money because of it, they could ask for as much as $ 20,000. Supportive documents are needed.
Overall, settlements have exchanged $ 300 million between Equifax and state and federal authorities to compensate affected consumers, though that fund could grow to as much as $ 425 million if claims lose the first $ 300 million. Equifax must also pay $ 175 million to states and $ 100 million to the Consumer Financial Protection Bureau.
If there is anything left in the $ 300 million fund after the four-year extended claim period, unused money can be used to lift the $ 31 million cap, the FTC spokesman said.
Many consumers pushed the FTC's suggestion that victims take free credit monitoring. In a comment posted during the FTC's post, a creditor said "my data has been compromised several times and I have received a number of free credit monitoring compensation." in part because it "comes with up to $ 1 million in identity theft insurance and individualized identity recovery services." The market value of this would be hundreds of dollars a year.
"Frankly, it all gets pretty tiring," a frustrated commentator wrote. "Finish these companies MUCH and give the money to consumers who have been compromised with data."
"This is unacceptable," wrote another. "The court and Equifax knew there were 147 million claimants. Why offer $ 125 per claim and set aside just $ 31 million? Did anyone forget to do the math?"