AP Photo/Mike Stewart
Months after class-action attorneys and regulators unveiled a $700 million dollar settlement with Equifax for a massive data breach affecting 147 million people, new court papers say approximately 3 million consumers have chosen the deal’s free credit monitoring services.
The July settlement let consumers choose between either 10 years of free credit monitoring — four years with the three credit bureaus, Equifax /zigman2/quotes/208789454/composite EFX -4.60% , TransUnion /zigman2/quotes/209192458/composite TRU -5.15% and Experian /zigman2/quotes/208623784/composite EXPGY -3.52% and another six years through Equifax — or up to $125 in cash compensation for those who already have credit monitoring services.
Both the plaintiffs’ lawyers and regulators have previously said the free credit monitoring was the better deal — especially considering that the people hoping for cash will, in all likelihood, get far less than $125. By contrast, the retail value of credit monitoring was an estimated $1,920, court papers noted.
Tuesday’s filing gave a first glimpse at the number of people who agree, so far, with the attorneys and regulators like the Federal Trade Commission.
“While all class members will not file a credit monitoring claim, nearly 3 million class members already have done so,” the filing said, adding the retail price of all that credit monitoring is “worth nearly $6 billion.”
The filing indicates the bucket of money for the cash compensation, capped at $31 million, will be used up. There’s a separate bucket of money — $69 million — that will be used to compensate victims’ lost time. So far, victims have filed claims for cash and lost time totalling more than $60 million, attorneys wrote.
Consumers have until Jan. 22, 2020 to file claims either for free credit monitoring, the cash payment, or to cover out-of-pocket losses from the breach. More people will “undoubtedly” sign up for the free credit monitoring by that point, their filing said.
Victims’ lawyers want $77.5 million in legal fees
The data comes in the plaintiffs’ attorneys motion for $77.5 million in legal fees, plus reimbursement for $1.2 million in expenses.
The lawyers deserve every penny, they say, given the work they’ve already poured into the case and what they’ll continue to do as the consumer claims process moves on in the months and years to come.
The court papers mention lengthy negotiations with Equifax that culminated in a late-night deal on settlement terms in March. The sides then took the terms to federal regulators and attorneys general, who added their own input, tacking on more time in the deal talks, according to the court filings.
Misunderstandings about the $125 offer
The filings also discuss the lawyers’ work to correct the public misunderstanding about the $125 offer.
“The media coverage created a widespread misperception that all consumers impacted by the data breach (and in some cases all Americans, regardless of class membership) could get alternative compensation of $125 simply by filing a claim,” the motion said.
In reality, class members who wanted the cash payment had to name the credit monitoring they already used and attest that they would use it for at least six months, the attorneys said. “Moreover, the settlement provides that alternative compensation claimants will receive up to $125, not a $125 guaranty,” the filing said.
The filing does not appear to specify the exact number of consumers who have sought the cash compensation, but lawyers wrote that “millions of claims” were filed within 48 hours of the website about the breach going live, most of which sough the cash compensation.
Many of those claims for cash might be invalid because victims may not meet the requirements, attorneys wrote, but it’s still likely the $31 million fund for the cash payouts could be drained and people seeking the $125 “would receive substantially less.”
Other settlement provisions let class members claim up to $20,000 to pay back out-of-pocket expenses and losses due to identity theft as a result of the breach, or costs to protect themselves from identity theft. It may be difficult for victims to trace harm directly to the breach, according to some observers.
Equifax did not immediately respond to a request for comment. It has denied wrongdoing in the settlement and the company’s CEO, Mark Begor, has previously said company officials haven’t found instances of stolen data being used for identity theft, nor has it found stolen data for sale on the dark web.
Equifax shares are up 44% from the start of the year. The S&P 500 /zigman2/quotes/210599714/realtime SPX -1.42% is up more than 21% and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.81% is up 16% in that time.