People affected by the 2017 Equifax data breach — that’s nearly 150 million U.S. consumers — will soon be eligible to apply for compensation. The settlement, announced Monday, includes up to $425 million to pay claims relating to the exposure of personal financial data.
The credit bureau settled with the Consumer Financial Protection Bureau, the Federal Trade Commission, 48 states, Washington, D.C., and Puerto Rico. Equifax will pay a total of at least $575 million, but denies wrongdoing. Massachusetts and Indiana have filed their own lawsuits and were not included in this settlement.
Affected consumers will get several years of help with credit monitoring, but the elevated risk of identity theft is lifelong. To protect yourself — whether you were caught in this breach or not — it’s best to freeze your credit with all three major credit bureaus (the others are Experian and TransUnion).
The federal district court in the Northern District of Georgia must approve the settlement. (Equifax is based in Atlanta.) Once the court approves it, the claims process can begin.
What do people get?
Most benefits are for people affected by the breach, but some are for all U.S. consumers. Once the settlement is OK’d, the Equifax settlement website will provide a tool consumers can use to determine if they are eligible to seek compensation. There’s also a national hotline at 833-759-2982.
All U.S. consumers are eligible to get six additional free credit reports from Equifax every year for the next seven years. That could help them watch for signs of identity theft.
People affected by the breach are eligible to receive:
Free credit monitoring
- Four years of credit monitoring that covers all three credit bureaus, provided through Experian, followed by six years of monitoring of their Equifax credit report. Or up to $125 if they choose not to enroll because they already have credit monitoring.
- A total of 18 years of free credit monitoring for affected consumers who were minors in May 2017.
Reimbursement and compensation
- Refunds of any fees paid to freeze or unfreeze credit after the Equifax breach was announced.
- Refunds of the cost of credit monitoring initiated after the breach. In addition, those who paid for credit protection from Equifax itself in the year before the Sept. 7, 2017, breach announcement can apply for refunds up to 25% of the cost.
- Losses from unauthorized charges to their account; costs for other breach-related expenses, such as attorney fees, postage and notary stamps.
- Compensation, at $25 per hour, for time spent dealing with the breach, up to 20 hours.
- $1 million in identity theft insurance coverage.
- Identity restoration services (i.e., coaching to help them resolve identity theft).
What should I do now?
Though you can’t yet apply for restitution, you can check the Equifax Breach Settlement website and sign up for email updates from the FTC .
While you wait for the application period to open:
- If you are currently paying for monitoring and will be for six more months, begin gathering bills or receipts to substantiate your costs.
- If you paid fees to freeze or thaw your credit after the breach, gather documentation.
- If you had bigger financial losses — such as from identity theft — document the costs, gather proof and estimate the time you spent fixing things.
When will I get these benefits?
The additional free credit reports from Equifax will start in 2020. It is not yet clear how quickly the other benefits will begin.
The initial application period will last for six months. However, an extended sign-up period will last for four years to cover identity theft that occurs later.
Be ready to file. “Consumers should start filing claims as soon as they start being accepted," says Chi Chi Wu, National Consumer Law Center staff attorney. “The more claims, the more Equifax pays.” A consumer can receive up to $20,000.
Should I take the free monitoring?
Taking the free monitoring is unlikely to hurt anything, and it might help. “Here’s my perspective on the monitoring,” says Atlanta-based credit expert John Ulzheimer. “If it’s free, take it.” Credit monitoring can alert consumers to signs of trouble.
Wu is not opposed to monitoring, but cautions that it cannot prevent identity theft — just alert you to signs it’s happened. “Much of the monetary relief focuses on credit monitoring, which is of limited effectiveness in preventing identity theft.”
The best protection: Freeze your credit
You already have access to the best credit protection available: freezing your credit. Freezing and thawing credit became free last September, in response to the Equifax breach.
“If you are not actively seeking credit, freeze your credit,” says Ed Mierzwinski, consumer program director for the United States Public Interest Research Group, a consumer advocacy group. Freezing your credit doesn’t affect your credit score. What it does do is block access to your credit reports, and that effectively blocks new credit from being opened in your name.
Freeze your children’s credit too, Mierzwinski says. “Kids may not have a credit history, but they do have Socials” — and Social Security numbers are what identity thieves seek. Bureaus must now create a credit file to freeze a minor’s credit if a parent requests it.
If you want more protection, Ulzheimer advises getting a fraud alert at all three bureaus, then freezing your credit at all three. “That’s two-layer protection, proactive and free,” he says.
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