As I wrote yesterday, Equifax was expected to announce a settlement for the data breach that exposed the personal information of 143 million people. That settlement has now been reached and announced. Equifax will pay $671 million to settle numerous state class-action lawsuits and investigations by the Federal Trade Commission, New York Department of Financial Services and Consumer Financial Protection Bureau.
The deal, which is still subject to a six-month court approval process, will establish a consumer restitution fund of up to $425 million. That fund will pay for credit monitoring from all three bureaus and any “out-of-pocket losses related to the breach.” As an alternative, consumers can request a $125 cash payment if they already have been signed up for credit monitoring services that will continue for at least six months. There’s also a chance at a big payout of up to $20,000. That’s for time and money affected consumer might have spent remedying fraud or misuse of personal information. The time spent will be compensated at $25 per hour for up to 20 hours, according to the settlement.
But claiming losses won’t be that easy. Mark Begor, Equifax’s CEO, repeated several times on a conference call Monday, the data connected with the Equifax breach has never been found for sale on the dark web. Instead, intelligence experts and security executives have told CNBC that the information was likely stolen by a foreign intelligence agency for spying purposes. This means proving your data was misused will be pretty difficult.
“Out-of-pocket” generally must involve proving a direct connection between a real financial loss directly connected to data stolen. That could require consumers to prove the fraud was related to having their data stolen as a result of the Equifax breach and not a breach of another company. The New York Attorney General’s Office however said it will enforce a rule that will allow consumers who have been the victim of identity theft from any breach, not just Equifax, to apply for the out-of-pocket reward. That still doesn’t make it much easier. Consumers will need to have a paper trail, including any lost funds from identity theft that were not reimbursed by a bank or credit card company, or that they spent time filing disputes over the fraud.