FTC surprised by flood of Equifax claims
The Federal Trade Commission (FTC) was caught off guard by the number of people seeking cash payouts from the settlement it reached with Equifax last week over the 2017 data breach that exposed sensitive information from 147 million people, the agency said on Wednesday.
The FTC said there is a limited pool of money to pay out victims of the data breach and urged consumers to instead consider opting for free credit monitoring offered to those affected as part of the settlement.
Robert Schoshinski, the assistant director of the FTC’s Division of Privacy and Identity Protection, wrote in a blog post that only $31 million out of the settlement’s $300 million compensation fund is available for the cash claims.
“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,” Schoshinski wrote. “Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed.”
Equifax agreed to pay a total of $700 million in a multi-pronged settlement with 48 state attorneys general, the FTC and the Consumer Financial Protection Bureau over the 2017 incident. But many lawmakers and privacy advocates decried the fine as a slap on the wrist for a credit reporting agency worth nearly $18 billion.
FTC Chairman Joseph Simons said during a press conference last week that his agency didn’t ask Equifax to pay more than $300 million because its economic analysts said that a larger sum would hurt the company’s ability to invest in better cybersecurity infrastructure and to remain competitive within its industry.