The Equifax data breach hit the headlines once again this week, as those affected got the chance to make their financial claim on the company.
An example of continuing bad news for the company, after the 2017 breach was blamed on a configuration problem, it cost the company $700m to settle with the Federal Trade Commission (FTC) last month after it was revealed in May that cleanup costs have gone well over a billion dollars.
This week the breach rolled into a new era, as the affected public was able to claim some money back from Equifax. Bearing in mind that a reported 147 million people were impacted by the breach, you would expect the company to be prepared for a large number of claims.
An official website was launched to allow people to select either a $125 payment or “at least four years of three-bureau credit monitoring, offered through Experian.” Even if those affected had signed up for credit monitoring, the claim for $125 could be made to cover that out-of-pocket expense.
The website said that the deadline for current losses was January 22, 2020, and for future losses it was January 22, 2024.
The option received plenty of column inches, and even noted congresswoman Alexandria Ocasio-Cortez backed the right to make a claim.
Even on the website, Equifax seemed to be preparing itself for a flurry of requests. The homepage read: “Based on the number of potentially valid claims that have been submitted to date, payments for time spent and alternative compensation of up to $125 likely will be substantially lowered and will be distributed on a proportional basis if the settlement becomes final. Depending on the number of additional valid claims filed, the amount you receive may be a small percentage of your initial claim.”
That prediction came true, as by Thursday of this week the money in the pot had reportedly run out. Despite $425m of the $700m settlement being put aside for credit monitoring for the victims, the FTC issued a warning that claimants should opt for the credit monitoring option instead, as the cash payments were capped at $31m.
Robert Schoshinski, assistant director of the privacy and identity protection division at the FTC, said: “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. Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed.”
Quite simply, there were more claims than they expected and the first assessment seemed to determine that they were never going to fund the $125 payment to all of those wanted it. After all, even a Brit like me would rather have $125 (around £100 at current exchange rates) than not, and I can only assume those affected felt the same.
The incident continues to be bad for Equifax and will leave a bitter taste in the mouths of those who thought that there could be some sort of financial conclusion to the breach. Instead, it is more bad news and more dissatisfaction for those affected.