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Don’t count on a big cash payout from Equifax. But still get the free credit monitoring. It’s far more valuable.

Equifax agreed to a number of remedies for its 2017 data breach, including creating a $31 million cash pot for affected consumers who don't want the free credit monitoring the company has offered. But the Federal Trade Commission is saying not everyone will receive the settlement amount originally promised. (Michael Nagle/Bloomberg News)
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The devil is always in the details.

Such is the case with the recent multimillion-dollar Equifax settlement.

In 2017, the Federal Trade Commission alleged Equifax failed to make a patch in its network after being alerted to the security vulnerability. As a result, people’s names, birth dates, Social Security numbers, mailing addresses and, in some instances, driver’s license numbers were compromised, putting people at risk of identity theft and other fraudulent activity.

Equifax, without admitting guilt, agreed to a number of remedies, including creating a $31 million cash pot for affected consumers who wanted to obtain credit monitoring on their own. There is also a separate $31 million available to pay claims submitted for time spent dealing with the fraud or identity theft that could have been a result of the breach. Money that people paid for unauthorized charges, freezing/unfreezing their credit files, etc., will come out of the larger pool of money set aside for consumer payouts, according to the FTC.

Here are the specifics of the credit monitoring option:

  • For the first four years, you get free monitoring of your credit reports at all three major credit bureaus — Equifax, Experian and TransUnion. Consumers will also get $1 million of identity theft insurance. These services will be provided by Experian.
  • For an additional six years, you can opt for free monitoring, but it only covers your Equifax credit report. This service will be provided by Equifax.
  • If your child was a minor in May 2017, he or she is eligible for a total of 18 years of free credit monitoring under the same terms as for adults.

The cash option includes the following:

  • Up to $125 if you don’t want the free credit monitoring. (The “up to” phasing of the settlement is Equifax’s financial escape clause in the event that too many affected consumers try to claim the $125).
  • If you want the cash instead of credit monitoring, you have to certify that you already have a service that monitors your credit file or files. And by the way, your own credit monitoring service doesn’t have to be a paid product. Free credit monitoring that you might be receiving through a credit card lender or some other company counts, too.
  • You have to have the service on the date you submit your claim form and promise you’ll keep it for a minimum of six months.

The FTC says there has been extraordinary traffic to the Equifax settlement website, with more than 4.5 million consumers having visited it since last week when the agency announced the settlement.

“The public response to the settlement has been overwhelming,” the agency said in a FAQ about the deal. “Because the total amount available for these alternative payments is $31 million, each person who takes the money option is going to get a very small amount. Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed.”

The FTC is now trying to manage people’s expectation for how much cash they will get.

Read: Equifax promised up to $125 for the hack. Now, the FTC says you’ll get ‘nowhere near’ that amount.

“You can still choose the cash option on the claim form, but you will be disappointed with the amount you receive and you won’t get the free credit monitoring,” the agency said.

Knowing that you now are likely to get far less money than expected, you should switch to the free credit monitoring. And you can do that even if you’ve already submitted a claim for the cash.

“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,” Robert Schoshinski, the FTC’s assistant director for the Division of Privacy and Identity Protection, wrote in a blog post. “Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed. So, if you haven’t submitted your claim yet, think about opting for the free credit monitoring instead. Frankly, the free credit monitoring is worth a lot more — the market value would be hundreds of dollars a year.”

The FTC said the settlement administrator will be sending emails to people who submitted a claim for the cash alternative asking for the name of the credit monitoring service they’ve gotten on their own. However, the email will also give you an opportunity to switch to free credit monitoring. If you don’t want to wait, send an email to

I elected to get the credit monitoring. I already have two other free services because of other data breaches. But those services will run out in about a year. Even if I could get the full $125, I figured the monitoring would be more beneficial in the long run. Although there are some limitations to credit monitoring, it’s still a level of scrutiny you will need in the future to fight fraud. Credit monitoring doesn’t stop identity theft or other fraudulent activity in your name because you get alerts after something has happened. But with early warning you can react faster to minimize the damage.

Here are the details for the separate pot of money for people who have been victimized or experienced identity theft even if they can’t prove it was the result of the Equifax data breach:

  • If you’ve had any incidents of identity theft or fraud, Equifax is offering $25 an hour up to a maximum of 20 hours for time spent dealing with the issue.
  • Also on the table is up to $20,000 for documented losses and expenses directly related to identity theft.

But just like the alternative pot of money for people who don’t want credit monitoring, these payments could be reduced depending on the number of claims. If there are too many people seeking payment for time spent, the money will be distributed on a proportional basis, the FTC said. I’ve had four separate incidents of fraud in which I spent hours trying to get charges removed or return merchandise I didn’t purchase.

Schoshinski said there’s still money available under the settlement to reimburse people who’ve paid out of pocket to recover from the breach.

“Say you had to pay for your own credit freezes after the breach, or you hired someone to help you deal with identity theft,” he wrote. “The settlement has a larger pool of money for just those people.”

Read: How the Equifax data breach settlement could be better

The total amount Equifax will pay for what it calls the “Consumer Restitution Fund” is $380.5 million. This fund includes money the company will spend to purchase the credit monitoring service for consumers and a rebate to people who already have a service in place. If the money runs out, Equifax will pay up to an additional $125 million to cover people’s out-of-pocket losses.

If you haven’t done so already, go to to find out if your personal data was exposed in the breach. You can also get information on how to file a claim.

Read more:

Security alerts on credit cards work. Just be sure to set them at the lowest amount possible.

No, that’s not the government calling threatening to ‘suspend’ your Social Security number.

Consumer agency’s $25 million settlement with Freedom Debt Relief shows the risks of such programs

Color of Money Question of the Week

What so you think of the Equifax settlement? Does it go far enough for you? Send your comments to Please include your name, city and state. In the subject line put “Equifax Settlement.”

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Bad policy proposal for food stamps

Last week, I wrote about a proposed rule change for the Supplemental Nutritional Assistance Program (SNAP), commonly known as the food stamps program. The U.S. Department of Agriculture wants to end automatic eligibility for certain recipients. The change would cut benefits to about 3 million people.

Under the proposal, to be automatically eligible for SNAP, a household must receive cash or noncash benefits from the Temporary Assistance for Needy Families (TANF) program valued at a minimum of $50 per month for at least six months. The noncash benefits that could result in automatic eligibility would include benefits that support work such as subsidized employment or child care.

Read: What my grandmother would have said about Trump’s food stamp proposal

I asked: What do you think of the proposal to change the eligibility rules for food stamps?

Dave Fetzer of Fairhope, Ala., wrote, “Although losing them would not have a big effect on me as I only receive $15 a month, I know there are an enormous number of people who stand to be disadvantaged if this is adopted.”

“I think it is criminal to reduce these benefits,” wrote Tom Holden of Itasca, Ill. “I agree it is weaponizing the benefits program against our poorest and most vulnerable segment of our population.”

W. Hudson from St. Louis wrote, “My wife and I received food stamps at one point in our lives. I was embarrassed to go to the grocery store with her. We had two small children. My wife found a job while I stayed home. Then eventually an opportunity came my way. We’ve never had to apply for the help since, and, I’m thankful for that. I feel that’s how the program should work, a temporary hand while you get on your feet. Maybe the government should help with the job opportunities so others can have the opportunity to also leave the assistance behind.”

“I am a Republican but when Trump et al. gave away billions in tax cuts for the very rich, I saw red,” wrote Valerie Cavanaugh from Ashburn, Va. “When I saw Mr. Trump proposing to cut SNAP, I saw red again, this time of anger. Really, Republicans? Really? I am so angry I am at a loss for words. This program does so much good, and costs a whole lot less than the problems caused by children going hungry.”

Michele Kitt of Virginia Beach wrote, “I am in agreement with you regarding the Trump administration’s proposed change to food stamp eligibility rules. This, like so many other proposals of the Trump administration, is another attempt to punish poor people for being poor. If you want to save big, don’t go after the poor — the small pittance they receive is not money that will wind up in someone’s bank account (like the last tax cut did for the wealthiest 1 percent) but rather dinner tables around the country.”

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