In theory, the Federal Trade Commission (FTC) protects citizens in the United States. In reality, however, it seems to favor the companies that it’s supposed to regulate. In a major scandal tied to Equifax, 147 million Americans had personal data stolen. The organization ultimately leaked birth dates, names, phone numbers, addresses, and social security numbers for thousands of people nationwide. About 209,000 credit card numbers were stolen, too. Some residents in Canada and the UK also reported having their personal data hacked. Hackers gained access to private information through the entity in September 2017. The data breach took place from May through July 2017.
Who is Equifax?
This organization is a credit reporting agency. It is one of three government-appointed credit reporting agencies (or a “CRA”) in the United States. The other two are called Experian and TransUnion. Collectively, all three agencies maintain records on the credit history of American citizens. They do so by compiling data from organizations that issue credit, such as banks, credit unions, and credit card companies.
Were You Affected?
The Identity Theft Resource Center says that any US resident or American citizen who has ever applied for credit may have had personal data stolen. Ultimately, that means nearly 50% of the US population may have had personal data confiscated. The breach reportedly affected adults and minor children, even if they have never had a credit score or credit report established.
What Should Victims Expect?
By the numbers, this is the outcome of the settlement.
- Settlement amount: $575 million
- Individual compensation: $125
- Actual compensation: $2
As compensation, victims were promised $125 after the data breach. That number was determined through a settlement. However, the actual cash payout is expected to be much less, warns the FTC. Because of the way the settlement is structured, victims will actually receive much less in compensation. A total of $2 each, to be exact. The company reportedly only set aside $31 million for its claims. That means fewer than a quarter million of all entitled individuals could actually receive the full $125 promised.
Credit Monitoring – a Viable Alternative?
In lieu of the cash payments, the credit reporting agency has offered victims a year’s worth of free credit tracking. However, experts disagree on whether or not offering credit tracking is a financially justifiable compensation. Some say that credit reporting is a service that costs the agency (and similar organizations) next to nothing to provide. They also disapprove of the fact that the US government is asking those affected to accept the offer of free credit reporting rather than take the cash payment. Others say that credit tracking is a service many Americans pay for, and it generally costs several hundred each year. They also say that credit reporting is a good way to prevent future data breaches of personal information. That’s because credit reporting tracks a person’s credit report across all three credit reporting agencies across the country. If unusual activity is detected, the affected individual (and credit reporting agency in charge) have the opportunity to find the source of the problem before it’s too late.
Is it Enough?
Regardless of whether affected Americans choose cash or free credit monitoring, experts say the compensation is not enough. The current breach was the largest of its kind, and also one of the most devastating. What’s worse, financial experts say, is that for the most part Americans did not choose the credit reporting agency – it chose them. Without consent, it collected personal data and broadcast individuals’ credit history on the web. In comparison to Equifax, many companies have been hit with a much larger fine for similar breaches. Facebook, for instance, encountered a $5B fine for its Cambridge Analytica hack. However, that pales in comparison to the fine charged to the credit reporting agency.
If you are a victim of a data breach or want to keep your credit information secure, we can help. Secure Forensics offers immediate 24/7 assistance worldwide. Our knowledgeable team can investigate data breaches and offer data protection solutions through a series of products and services. Our own line of SecureDrives, for instance, is the best hardware-encrypted cold storage for financial data.
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