After announcing a $700 million settlement with Equifax last week, the US Federal Trade Commission said the public response was "overwhelming" and that the people who signed up to receive a $125 cash payment won't get "nowhere near" that sum.
"The public response to the settlement has been overwhelming. Millions of people have visited this site in just the first week," the FTC said in an update to the Equifax settlement web page.
"Because the total amount available for these alternative payments is $31 million, each person who takes the money option is going to get a very small amount. Nowhere near the $125 they could have gotten if there hadn't been such an enormous number of claims filed," the agency added.
Instead, the FTC recommended that users choose an alternative option for the free credit monitoring instead, as it "provides a much better value" in the long term.
The $125 cash option explained
According to the terms of the Equifax-FTC settlement, users who had their data stolen by hackers in the 2018 Equifax breach had two options at their disposal.
If they already had free credit monitoring in their name, they could choose a cash payment of up to $125, to cover the cost of what they already paid for credit monitoring.
But if they didn't have any sort of credit monitoring in their name, they could sign up for credit monitoring services for up to ten years, on Equifax's expense and as part of the Equifax-FTC settlement.
FTC: Free credit monitoring is the better offer
"If you haven't submitted your claim yet, think about opting for the free credit monitoring instead," said Robert Schoshinski, FTC Assistant Director for the Division of Privacy and Identity Protection.
"Frankly, the free credit monitoring is worth a lot more - the market value would be hundreds of dollars a year," Schoshinski added.
"And this monitoring service is probably stronger and more helpful than any you may have already, because it monitors your credit report at all three nationwide credit reporting agencies, and it comes with up to $1 million in identity theft insurance and individualized identity restoration services."
The FTC said people who already submitted claims for the $125 cash option can still switch in the coming days and weeks.
"For those who have already submitted claims for this cash payment, look for an email from the settlement administrator," Schoshinski said.
"They'll be asking you for the name of the credit monitoring service you already have. Or, if you want to change your mind, you'll have a chance to switch to the free credit monitoring. You can also email the settlement administrator, JND, at info@EquifaxBreachSettlement.com."
Don't confuse the $125 cash payment for other claims
Furthermore, it must be mentioned that the $125 payment is separate from other payments in the Equifax settlement. The $125 option was made available only for users who already had credit monitoring services in their name.
People who spent money from their own pockets to recover from identity theft, people bought credit freezes, or those had other costs caused by the Equifax breach can submit separate monetary claims to recover those expenses as well. These claims are capped at $20,000 per person. However, these payments are harder to get as victims have to prove monetary damage with their claims.
More details on the settlement's web page at: equifaxbreachsettlement.com
Over 147 million people had their data stolen in the 2018 Equifax breach.
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