AP Photo/Mike Stewart
Wednesday was the deadline for anyone affected by the massive Equifax data breach to file a claim seeking compensation — but those expecting the maximum $125 payout may be disappointed.
Victims of the 2017 cyberattack on the credit bureau are eligible for either free credit monitoring, money instead of monitoring, or compensation for expenses and losses.
More than 15 million of the 147 million people affected by the breach have put in claims for some sort of redress in the resulting $700 million class action settlement, according to legal papers filed last month.
Now the deadline is closing for all other class members to file a claim with the settlement administrator.
The settlement, unveiled in July, essentially gave consumers two choices. They could take up to 10 years of free credit monitoring. The first four years would be with Equifax and two other credit bureaus, Experian /zigman2/quotes/208623784/delayed EXPGY -4.11% and TransUnion /zigman2/quotes/209192458/composite TRU -1.98% . The next six years would be with Equifax.
Victims of the breach who didn’t want the credit monitoring could receive a cash payment instead.
The settlement offered two choices: Opt for up to 10 years of free credit monitoring or receive a payment instead.
The maximum payout was $125, but regulators and plaintiffs’ lawyers have cautioned applicants that they wouldn’t get anywhere near that amount because there was just a $31 million pot of money for those payouts.
In addition, victims could also seek reimbursement for damages — like fallout from unauthorized charges — and payment for the time they spent addressing the breach’s consequences. That could include the time spent freezing credit reports.
The company has denied wrongdoing in the settlement and its CEO, Mark Begor, has previously said the company hasn’t found instances of stolen data being sold on the dark web, though some regulators say otherwise.
Northern District of Georgia Judge Thomas Thrash Jr. approved the settlement earlier this month.
“We are pleased that the Court approved the settlement, which provides significant benefits for consumers whose information was impacted in the 2017 breach,” an Equifax spokesman said.
Ahead of court approval, class-action lawyers representing consumers said as of Dec. 1, there had been 3.3 million claims for credit monitoring from Equifax /zigman2/quotes/208789454/composite EFX -3.93% and two other credit bureaus, another 2.3 million claims for additional monitoring from Equifax and over 4.5 million claims for “alternative reimbursement compensation,” or the cash payout.
That works out to roughly 14 cents for every claimant, because the money was coming from a $31 million fund within the settlement.
Plaintiffs’ lawyers representing the consumers affected by the breach — who received court approval to receive $77.5 million in legal fees — faulted “misleading media coverage” in their filing, saying the reports made it seems the $125 was an automatic deal.
Credit monitoring was a better deal, plaintiffs’ lawyers contended, because the maximum of 10 years credit monitoring had a retail price of $1,920.
Credit monitoring was a better deal, they contended, because the maximum of 10 years credit monitoring had a retail price of $1,920.
“Every class member submitting a valid, out-of-pocket loss claim is expected to be completely reimbursed for losses fairly traceable to the breach,” plaintiffs’ lawyers said. The court papers from last month said class members have filed 1.8 million claims to be compensated for time spent addressing the breach.
Participation rates, objections
“This settlement has achieved historic results, with an overwhelmingly positive response from the class,” plaintiffs lawyers wrote, noting a 10% participation rate.
The settlement administrator , JND Legal Administration, has received 130 million visits on its website, court papers show.
That rate in the massive Equifax case hovers just above typical participation rates in consumer class action cases.
There was a 9% median claims rate on consumer class action cases, according to an FTC study on the issue in September.
The same FTC study said whenever class participants submitted claims, 86% were approved.
A mere 388 class members have directly objected to the proposed deal. That’s .00022% of the 147 million-person class.
A mere 388 class members have directly objected, according to the plaintiffs lawyers. That’s .00022% of the entire 147 million-person class.
One complaining class member was attorney Ted Frank of the Hamilton Lincoln Law Institute in Washington, D.C., who’s long challenged the fairness of consumer class-action settlements that, he contends, only help create a plaintiffs’ lawyers pay day.
The plaintiffs’ attorneys in the Equifax case said their fees are reasonable, given the size of the case, its outcome and their continuing work on the case in the years to come.
Equifax shares are up 10% from the start of the year. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.54% is up more than 2% in that time and the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.62% is up 3%.
This story was published on Dec. 9, 2019 and updated on Jan. 22, 2020.