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Government Businesses The Almighty Buck United States

FTC Says 'You Will Be Disappointed' if You Choose $125 For Equifax Payout (theverge.com) 149

The Federal Trade Commission said today there's been "overwhelming" interest in a settlement agreement with Equifax, and that consumers looking for a previously announced payout of up to $125 may be disappointed. From a report: The agency said this month that it had reached a $700 million agreement with the credit reporting agency over a massive breach of private data in 2017. As part of the settlement, consumers whose data was compromised could request up to $125 or free credit monitoring services. The potential for a quick payout generated major interest, but only $31 million of the settlement was set aside for cash payouts, meaning each payout could be far smaller than $125, depending on how many people request one.

In a blog post today, the FTC tempered expectations. "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," the agency said. "Nowhere near the $125 they could have gotten if there hadn't been such an enormous number of claims filed."

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FTC Says 'You Will Be Disappointed' if You Choose $125 For Equifax Payout

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  • FTC says (Score:5, Insightful)

    by Anonymous Coward on Wednesday July 31, 2019 @02:35PM (#59019306)

    The FTC is basically saying "fuck you", because they decided that only $31 million of the $700 million settlement was set aside for cash payouts.

    • Re:FTC says (Score:5, Insightful)

      by jriding ( 1076733 ) on Wednesday July 31, 2019 @03:17PM (#59019630)

      Hey FTC,
      Sounds like you fined them too small an amount.
      So now our impact, for life by the way, is worth even less.
      Start doing your job and stop negotiating. When I get a fine I can't negotiate it, so why do the big companies get to?

      • Sounds like you fined them too small an amount.

        Equifax is not a very profitable company, and they don't have much in assets. You can't fine them more than they have. A big fine would just bankrupt the company, reducing the number of credit companies from 3 to 2, which would not be in the public interest.

        But still, the $700M is silly. It is just a made-up number. They are valuing the "credit monitoring" as a valuable service worth the actual retail price ($100 or so) when it actually costs Equifax about $0.001 to provide.

        Additional money, capped at $

        • First, Equifax had about $3 billion in revenue. $700M isn't anywhere close to a break-the-company fine. (And yes, their profit is lower, but their profit is after things like bonuses that don't have to be paid. Also fines can be negotiated such that they are paid over years)

          Second, insurance exists. Equifax won't be paying the money, their insurance company will.

        • Comment removed (Score:5, Interesting)

          by account_deleted ( 4530225 ) on Wednesday July 31, 2019 @03:38PM (#59019738)
          Comment removed based on user account deletion
          • If the market currently is big enough for three, expect a third monitoring bureau to start right up.

            Non-regulated free markets do *not* work like this.

        • WTF!?!?!

          The Courts (the USA Judicial System) fine people more than they have. Just look at the "copyright" cases -- the older video I watched 2 nights ago stated that I would be fined $250,000.00 for copyright infringement. Do I have $250K? Do you?

          Why do "real" people get nailed on settlements but "legislated" people (businesses) get off easy?
          Why does Equifax get a free (reduced-price) ride?
        • Their existence is the problem. Liquidate them into nonexistence.

        • Equifax is not a very profitable company, and they don't have much in assets. You can't fine them more than they have. A big fine would just bankrupt the company, reducing the number of credit companies from 3 to 2, which would not be in the public interest.

          Having a company that collects massive amounts of personal financial information on people for the purposes of keeping score on how well people live in a hole of debt they're expected to dig themselves into and offering little means control for the people over their own data or even giving people the chance of opting out of such a system entirely is arguably not in the public interest. What's happened with Equifax to date has definitely not been in the public interest. Offering a paltry credit monitoring se

          • by dcw3 ( 649211 )

            "Get back to me when we see the Equifax CEO, CIO, and CSO in front of a judge on criminal charges for gross negligence facing 5-10 years in Folsom and I'll change my tune. Until then it's just smoke being blown up the public's ass."

            If the Obama administration couldn't jail anyone from Wall St. after the housing collapse and subsequent recession, do you think something as small as this even comes close?

        • by Cederic ( 9623 )

          You can't fine them more than they have. A big fine would just bankrupt the company, reducing the number of credit companies from 3 to 2, which would not be in the public interest.

          Equifax have $7bn in assets or (if you want them to be able to pay debts owed) over $3bn in shareholder equity.

          That means you can fine them $3bn without them going bankrupt. If they don't have the cash, you can take some of the assets instead - e.g. the credit reference part of the business.

          That can be sold at fair value, retaining the third major credit reference agency in the US. Just under another name, another brand.

          The only people to lose out are the shareholders, and that's the risk they took when the

    • They were only one party in the negotiated settlement. FTC's job is to protect consumers, and it sounds like that's what this warning's about.

  • by bistromath007 ( 1253428 ) on Wednesday July 31, 2019 @02:36PM (#59019310)

    This incredibly contrived situation was definitely not created to affirm somebody's hypothesis about the prisoner's dilemma.

  • by Anonymous Coward on Wednesday July 31, 2019 @02:36PM (#59019312)

    That's the real problem here.

  • by Kwirl ( 877607 ) <kwirlkarphys@gmail.com> on Wednesday July 31, 2019 @02:36PM (#59019316)
    What the hell..
    • by Anonymous Coward

      First, abandon any foolish notion that the intent here was to make fair reparations to the injured parties. That was the last thing on anyone's mind.

      The intent was to placate an angry mob. Nothing more.

      They wanted to make some feel-good gestures towards the mob that leaves them satisfied that the evil-doers had been punished, without actually punishing them in any meaningful way.

      That's why they set aside a fixed budget for this. It sounds like a lot of money to most of us, even though it is only a fracti

  • . . . can I get a head of an Equifax executive on a platter . . . ?

    Or, alternatively, just send me the names and addresses of the executives, and then some of my associates will sort it out:

    The Undertaker and His Pals [wikipedia.org]

  • WTF FTC? (Score:5, Informative)

    by Anonymous Coward on Wednesday July 31, 2019 @02:42PM (#59019374)

    So I'm not even going to get the ridiculously low $125 for releasing my SS# and other personal details? This has to be one of the largest giveaways to a corporation in US History. Equifax should have gottent he death penalty. i.e. been fined so much, they went out of business. That seems fair.

    Instead, they got a minor little fine, and had to give out a product they already sell, credit monitoring service. WTF?

    I knew it was bad when they limited claims to just a couple years. As if I can have my ID stolen because of this breach in 2 years, but not 6. Frankly, the way data breaches go it's MORE likely I'll have my identity stolen in 10 years than it is in the first year. Whoever stole this data is sitting on it, sold it to someone, who will sell it again, and again and again. Eventually the damn thing will be available on ThePirateBay, and anyone with half a whit can download it.

    • "buh buh the american economy relies on our services for accurately assessing risk for lenders. we're too big to fail, you need us"

      • There also needs to be competition among credit bureaus to ensure that you get fairly fucked.

        I mean, the FTC is just supporting robust, free-market capitalism here.</snark>

  • Perhaps (Score:2, Insightful)

    by Anonymous Coward

    Perhaps the reason so many people opted for the cash payout is because we have zero trust in the credit monitoring services provided by the same fuck knuckles who lost our data in the first place and/or felt that effectively paying them $125 for credit monitoring services would be like rewarding them for losing our data. "Hey, look, our credit monitoring division just signed up millions of new customers..."

  • by JoeyRox ( 2711699 ) on Wednesday July 31, 2019 @02:44PM (#59019386)
    The FTC knew how many potential claimants there might be based on the known number of accounts breached, so why do they state $125/claimant + $25/hr spent if they knew the settlement they accepted wouldn't be large enough to accommodate that?
    • by jeff4747 ( 256583 ) on Wednesday July 31, 2019 @03:52PM (#59019810)

      $125 is what it costs if you buy credit monitoring for a year. So that's the value they assigned to the settlement.

      The fact that it costs Equifax about $0.0000001 per year to actually do the monitoring is not so widely discussed.

  • ... on Equifax. Leave Experian and TransUnion open for potential lenders.

  • by OrangeTide ( 124937 ) on Wednesday July 31, 2019 @02:53PM (#59019448) Homepage Journal

    By April 15 there may not be quite as much money available to the IRS as originally promised, so we'll have to agree that I'll pay a substantially smaller amount of money.

    • by mysidia ( 191772 )

      The IRS will get its money PLUS interest PLUS a hefty fine will both be rolled into "its money".

      Within the last 80 years, so many people have tried to avoid paying taxes, that the federal government
      involved systems to prevent that.

      Some of the major aspects of the system are that Organizations and individuals who pay other people money have to co-operate with the federal government to collect taxes owed by the recipient --- If companies are notified of your failure to report and pay taxes, then they have

    • Hey, hey, you can't just walk away like that. Be fair, also offer to monitor the IRS's credit. Credit monitoring is valuable, you know, and not every credit card will do it for you for free.
  • So You sign up:

    1) You get a fraction of the $125 if you get anything at all which you probably won't because their is not nearly enough money to get distributed to everyone that signs up.
    2) You forgo your right to sue them if you are impacted by this EVER AGAIN FOREVER (which you probably will be)

    Sounds like a deal to me!

  • We can’t let the commoners get too uppity.

    I chose the payout knowing full well I wouldn’t get anywhere near $125 - but it was the only even marginally punitive option (it’s not like I’m going to go to the time or expense of suing them as an individual). “Free credit monitoring” likely doesn’t cost Equifax anything, thanks to the various handshake agreements between the Big Three. And I can already monitor my own credit for free, for what little that’s worth an

  • by Ann Coulter ( 614889 ) on Wednesday July 31, 2019 @02:57PM (#59019488)

    Equifax should note on their credit reports if you made a claim in a class action suit. Businesses are keenly aware that litigious individuals are riskier and should mitigate that risk. This would also serve to discourage class action suits in the future.

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Wednesday July 31, 2019 @03:10PM (#59019584)
    Comment removed based on user account deletion
    • "Free credit monitoring" implies equifax credit monitoring has any real value whatsoever after their massive data breach. why would anyone trust them to monitor so much as a rat in a subway station let alone their data again?

      no. ill take the cash and walk. Its about sending a message.

      I thought that was what started this problem to begin with. They decided to give everyone free credit monitoring of any other individual in the US. They were just trying to outsource their labor to the Silk Road or whatever entity the current successor of that is.

  • They want us to choose credit monitoring service instead because it's worth hundreds of dollars instead of the lousy $125?

    Well, it's not to me.

    FTC: Equifax might run out of cash, so please take the credit monitoring [cnbc.com]

    “For those who have not submitted a claim, the FTC is recommending that affected consumers consider choosing the free credit monitoring service, which is worth hundreds of dollars and comes with identity theft insurance and restoration services.

    Equifax needs to pay up.

    • >They want us to choose credit monitoring service
      Because they want to up sell us services we didn't want or need before all these breaches.
  • For some, it's not about getting a $125 payout...it's just about making sure they pay as much as possible. Heck, if enough people go for the payout, the processing and postage costs might even cost them significantly more, if just the headache and public awareness of it.
  • I've been part of so many data breaches (Home Depot, Target, Equifax, and a few others I probably don't know about) that I have multiple overlapping offers of credit monitoring. At this point, if you are an adult in the United States, you can pretty much assume everything needed to apply in your name for any sort of credit is readily available on the dark web.

  • They made the stupid deal letting Equifax get away with murder, let them pay for their own mistake.

    IMHO, $125 isn't enough for dealing with the Equifax fuck up. But if that's the best I'm going to get then I want all of it.

    Too bad nobody at the FTC is actually responsible for anything, else some heads might roll and the next settlement (Capital One anyone?) will be a better deal for the victims, instead of the causes.
  • What? I might wind up disappointed by the outcome of a class action lawsuits? I'm so shocked that I can't even find the words to describe how I feel. What has the world come to when you can't even expect a satisfying class a room payout anymore?

  • Indeed. I am disappointed---in the FTC.

  • and sue them yourself. You are not obligated to file in a clash action. You are legally allowed to take action on your own.
  • For false and deceptive advertising practices? Sadly, there probably isn't (sovereign immunity and all) but the FTC should have to fucking pay for any difference between what the settlement calls for and what is needed to ensure a $125 payout to every person who chooses that option out of their own pocket. Fuck, if there was any justice whoever approved those settlement terms should have to pay for this out of their own damn pocket.

    This isn't the way lawsuit settlements are supposed to work. The idea is

    • Note, that the very fact that people seem to be massively inclined to take the cash rather than the monitoring witnesses the fact that those services don't represent $125 dollars worth of benefit to them. The fact that someone else *might* be inclined be willing to pay that fee in other circumstances is only relevant if the settlement agreement ensures that those credit monitoring services are transferable. I can guarantee you that it doesn't because, in fact, credit monitoring offers a very different pro

  • That's what the 'settlement' or 'remedy' or whatever you want to call it should be: take all the management and other responsible persons at Equifax who were responsible for this breach happening, put them up against a wall, and shoot them in the head. There's no telling how much long-term damage has been done by the breach, therefore there's no dollar amount you can define that will compensate anyone for it. However terminating with extreme prejudice the people who allowed it to happen might serve as enoug
  • I already have two lifetimes of "free" credit monitoring due to past breaches. I'm sure my great-grandchildren will be happy to know my legacy lives on well after my death when they get another alert that my SSN was used.

    I think cash payouts need to be the norm for any company impacted, and it needs to come from the compensation of the board of directors starting in the quarter the breach occurred. We need real consequences for saving a $ or $$ on Information Security.

  • I'm reading a lot of you complaining about how the fine is too small, or that they should have been put out of business by the FTC. Well, that's not the FTC's job, and the purpose of the fine isn't to compensate you for your perceived loss (if you have a real loss, take em to court). And it's not to put the company out of business because you'd only be punishing the people left behind by the officers who got the boot. Those people don't deserve to lose their jobs unless they knew what was going on. The

  • by grahamtriggs ( 572707 ) on Thursday August 01, 2019 @03:32AM (#59021840)

    Firstly, if people deserve a $125 payment for the damage caused, then that is what they should get if they claim it - not up to that, based on some cap for payments.

    Secondly, if there is a cap on payments, you shouldn't be "selling" it on the basis of people getting a high-watermark value. Divide the amount by potential claimants, and tell them they will get at least that amount. Then up the payments if not everyone claims.

  • where does the remaining $670 million go to?

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