The fine print on the settlement for the Equifax hack ensured that it would not be simple.
The company agreed to offer people 10 years of free credit monitoring or up to $125 if they were among the 147 million Americans whose data was stolen in 2017.
But there was a catch. Due to the fact that the pool allotted for $125 payouts is capped at $31 million, there was always a risk that the payout would amount to less than that if demand was high.
And on Wednesday, the Federal Trade Commission announced that the payout was likely to be “nowhere near” that amount after more than 4 million people visited the settlement site in the last week.
“The public response to the settlement has been overwhelming,” the FTC wrote in a Web posting. “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.”
The FTC said that it released the bad news to try to encourage people to opt for the free credit monitoring instead of the cash payout.
“You can still choose the cash option on the claim form, but you will be disappointed with the amount you receive,” the FTC said.
The $700 million worth of settlements hashed out between state and federal authorities and Equifax earlier this month included $425 million to reimburse people, in amounts of up to $20,000, for losses incurred because of the breach; $175 million to states and $100 million with the Consumer Financial Protection Bureau.
The pool of funds for the loss reimbursements is still intact, the FTC said.
The September 2017 breach was one of the worst data breaches ever, given the large number of people affected and the volume of personal data that was exposed.
One of the country’s three major credit reporting bureaus, Equifax plays a central role in determining Americans’ financial futures, and news of the company’s breach touched off anger from across the country. The company had failed to adopt even the most elementary cybersecurity protections before the breach. After it happened, it took the company 76 days to discover it.
On Wednesday, dissatisfied consumers quickly took to the comments section under the FTC’s announcement.
“This is unacceptable,” one wrote. “The court and Equifax knew there were 147 million claimants. Why offer $125 per claim and set aside only $31 million? Did someone forget to do the math?”