Federal Judge Gives Final Approval to Class Action Settlement Over 2017 Breach

A federal judge in Atlanta has given final approval to a settlement that resolves a class action lawsuit against credit bureau Equifax, which in 2017 suffered one of the largest data breaches in history.  The deal is essentially the same as the final version of a proposed agreement reached in July 2019 with the Federal Trade Commission. Consumers will get free credit monitoring, or if they already had that in place, up to $125 in a cash payment (see: Equifax Negotiates Potential $700 Million Breach Settlement).

But the settlement includes a $31 million cap for any such cash payments. It means that the more people who apply for a payment, the more the payment amounts will be proportionally lowered (see: Is the Equifax Settlement Good Enough?).

Still, Chief Judge Thomas W. Thrash Jr. writes that “this settlement is the largest and most comprehensive recovery in a data breach case in U.S. history by several orders of magnitude.” The minimum cost to Equifax will be $1.38 billion, which includes $1 billion in security upgrades, Thrash writes.

Enthusiasm for Claims

The settlement fund now negotiated as a result of the class action lawsuit against Equifax totals $380.5 million, which covers attorneys’ fees, administration and class benefits. If that runs out, Equifax may have to pay up to $125 million to satisfy claims for out-of-pocket expenses.

The deadline for applying for cash compensation is coming up quickly, on Jan. 22, and can be filed via the settlement website. Consumers can file for out-of-pocket expenses or time spent for their own efforts to mitigate the effects of the breach.  The settlement says that some consumers could receive up to $20,000 for out-of-pocket losses that are “fairly traceable to the breach,” but such requests require documentation.

Consumers can also apply for up to 20 hours of compensation “for time spent taking preventative measures or dealing with identity theft.” That pot of money is capped at $38 million. There is no documentation required for up to 10 hours.  All consumers are eligible for four years of credit monitoring provided by three credit bureaus, including Equifax, as well as six years of credit monitoring and identity protection services through Equifax. The settlement says Equifax’s offering is valued at $24.99 per month.

The offer of free credit monitoring through the same entity that lost the data in the first place has struck many as a cruel irony (see: Consumer Advocates Criticize Equifax Settlement Plan).

Settlement of Fines: So far, class action claims for the settlement have been filed by more than 10 percent of the class, which is very high for those types of claims. Judge Thrash writes that the settlement website had been visited more than 130 million times as of Dec. 1, 2019, with 40 million of those representing “discrete visitors.”  Also, the claims administrator has received more than 15 million claims from verified class action members, including 3.3 million for credit monitoring.

In a separate legal measure, Equifax settled in July 2019 with the FTC, the Consumer Financial Protection Bureau and 50 U.S. states and territories.  Equifax agreed to pay $175 million to 48 states, the District of Columbia and Puerto Rico, according to the FTC. It also agreed to pay $100 million to the CFPB in civil penalties, the agency said.

Source:  Bankinfosecurity.com