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."
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."
FTC says (Score:5, Insightful)
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)
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?
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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 $
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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.
Re: FTC says (Score:3)
Could they pay a lot more? No.
That depends on whether or not those responsible are actually held responsible; being willing to pierce the corporate veil and all that.
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That depends on whether or not those responsible are actually held responsible
The people responsible were fired years ago.
They are not affected by this settlement at all.
being willing to pierce the corporate veil and all that.
Piercing the veil means holding owners (shareholders), not management, personally responsible.
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If the owners got dividends or shareholder value from those profits during those years, then they should be on the hook for this egregious breach of customer privacy. Fining the company billions to the point that it eats into shareholder equity is a very appropriate thing to do.
Re: FTC says (Score:1)
Uh, most of us here are almost certainly shareholders via various funds.
"Institutional investors hold a majority ownership of EFX through the 98.26% of the outstanding shares that they control."
Why would it make sense to take money out of my pocket to pay me?
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I guess I'll just quote myself since I directly covered your objections.
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
Re:FTC says (Score:5, Insightful)
Could they pay a little more? Probably.
Could they pay a lot more? No.
Depends on if you consider $20M - $42M a little or a lot.
From: Equifax CEO pushed out after data hack getting nearly $20 million in bonuses [cbsnews.com]
The disgraced former CEO of Equifax, ... is in line to receive as much as $19.6 million in stock bonuses since leaving the company ...
On top of the stock awards, Equifax has agreed to cover Smith's medical bills for life, a benefit the company estimates is worth another $103,500, according to a company filing. He also walked away with a $24 million pension, and $50,000 in tax and financial planning services.
What's more, none of Smith's pay is likely to be clawed back by the company, ...
Seems to me Equifax could pay victims about $42M more ...
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"Seems to me Equifax could pay victims about $42M more ..."
Doubtful. Executive compensation is usually handled with pretty solid contracts that the company can't likely reduce.
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Comment removed (Score:5, Interesting)
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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.
Re:You can't fine them more than they have. (Score:2)
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?
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Their existence is the problem. Liquidate them into nonexistence.
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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
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"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?
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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
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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.
Totally not a simulation. (Score:5, Interesting)
This incredibly contrived situation was definitely not created to affirm somebody's hypothesis about the prisoner's dilemma.
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There is no limit here, the company is going to be bled dry.
I really doubt this will happen. If anything, the slap on the wrist and extra revenue from credit monitoring will make them grow.
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that is specifically not what is happening, actual non-lawyer people are only getting that $31mil, period
this is all completely normal, and it's why class-action suits, although the only method of getting any recourse at all, are mostly a scam
$700 million is wayyyyyy too low (Score:5, Insightful)
That's the real problem here.
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Re: $700 million is wayyyyyy too low (Score:5, Funny)
"I am altering the deal. Pray I don't alter it any further."
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So they set aside 22 cents per impacted user? (Score:5, Informative)
It makes perfect sense. (Score:1)
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
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I did not opt in. The just collected my info.
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The fact that it's a "Credit Bureau" that runs on advertising dollars ought to be a red flag from the getgo
Good news! They don't run on advertising dollars.
They charge banks (and similar) a fee when the bank asks for a credit report on an applicant. The crap they sell to us mere mortals doesn't make us nearly as much money.
Re:Looks like the FTC fucked up (Score:5, Informative)
Because the $700 million is not real. This is an inflated estimate of the value of the settlement designed to make the administration look better. Much of the money was allocated to credit monitoring because it is much cheaper to implement than its faked up cost in the settlement would claim. It would be nice if an expert in real valuations would analyze this settlement and write an article about it.
There are many ways in which the government works with businesses in this way to allow the business to look to the public like it is hurting in a way that is just a numbers game.
Another of my favorites is massively inflated claims by hospitals of losses due to nonpaying cases. Basically, they give a service to the insurance companies for, say, $10K. They then charge cash customers $60K for the same service. If you talk with them a bit, you can get that to $30K. But, when they claim losses, they'll use the $60K number for all services that went unpaid despite the fact that $10K apparently covers it fine. The hospital benefits with both a woe-is-me claim to the public and a tax break. The government looks the other way.
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Much of the money was allocated to credit monitoring because it is much cheaper to implement
Uhm... right.. the Equifax breach was 2 years ago. The annual subscription of credit monitoring services I purchased because of that in 2017 and 2018 already cost way more than $200, so maybe not so overstated -- but could be actual standard retail value of those services.
Anyway, the paltry $125 from FTC settlement wouldn't even cover what I already had to pay to mitigate undue risks caused by financial institu
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And yet you can claim the more than $200 as additional expense in your settlement claim. Retail value matters not at all if they are the service provider. It costs them nothing and doesn't punish or hurt them financially at all. It gives them a free pass.
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Retail value matters not at all if they are the service provider.
Are they really? They are 1 of the bureaus, but the "monitoring service" is reportedly a 3-bureau monitoring service.
As far as I know the settlement administrator ought to be independent of the parties,
and clearly should not to be colluding to return settlement funds back to a plaintiff on the backend by allocating the settlement to
buying services.
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not at all if they are the service provider.
The service provider for the 'free monitoring service offer' is reportedly Experian not Equifax
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Instead of a cash payout . . . (Score:2)
. . . 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]
Re: Instead of a cash payout . . . (Score:2)
can I get a head of an Equifax executive on a platter . . .
Sure, as long as you agree to not tell us WTF you plan to do with it...
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If I can't get my payout, I'll instead take an agreement that Equifax promises to NEVER collect, buy, sell, or retain information on me or my family again. I think that's worth FAR MORE than $125.
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I remember a report a while back for "damages" from Rock Star Games, for some explicit material that was only accessible by hacking your game. Because other then the lawyers who complained and won the case, no one was injured so they didn't come up to collect money
WTF FTC? (Score:5, Informative)
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.
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"buh buh the american economy relies on our services for accurately assessing risk for lenders. we're too big to fail, you need us"
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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)
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..."
In other words, FTC settled to too little (Score:5, Insightful)
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Isn't this about par for Ajit Pai's FCC?
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FTC !== FCC
However, I wouldn't say they aren't equivalent right now.
I would say the FTC is equally or more conflicted (Score:4, Informative)
When a new consumer regulator gets appointed in Washington, Remington Gregg, as a lawyer with the advocacy group Public Citizen, routinely submits a request under the Freedom of Information Act for the appointee’s financial disclosure statement. This can help spot any potential conflicts of interest.
Gregg told me he usually expects to find a handful of possible conflicts, especially under a business-friendly Republican administration. There might be four or five affiliations that raise questions about the appointee’s fairness or impartiality.
When he recently received the disclosure statement of Andrew Smith, the new director of the Federal Trade Commission’s Bureau of Consumer Protection, Gregg said he almost couldn’t believe what he was looking at.
It showed that Smith had provided legal or lobbying services for more than 50 companies and business groups, including some that have gained notoriety for scandalous behavior or that have actively worked to oppose consumer interests.
Equifax? Present.
Wells Fargo? Yup.
Payday lenders? Say hi to the Online Lenders Alliance.
Smith has received paychecks from Bank of America, JPMorgan Chase, Capital One, Goldman Sachs, American Express, PayPal and Credit Karma.
He’s worked on behalf of Uber, Amazon, Microsoft, LinkedIn, Disney and CoreLogic.
He’s advanced the interests of Pharmaceutical Research and Manufacturers of America — the drug industry — and the Consumer Data Industry Assn., which represents the big credit bureaus.
He’s even represented Cash America International, which operates hundreds of pawn shops and check-cashing stores.
“It’s crazy,” Gregg said. “It’s a corporate lawyer’s dream client list.”
He recalled a sense of growing astonishment as his eye traveled down this who’s who of businesses that don’t always put consumers first.
“There was no one else who was a good candidate for the job?” Gregg wondered. “No one else without so many conflicts?”
I put those questions to the FTC.
Peter Kaplan, an agency spokesman, replied that “Mr. Smith is widely respected as one of our country’s best and most experienced consumer protection lawyers.”
In fact, Smith appears to have little if any experience in consumer protection. Prior to joining the FTC, he was a partner at the Washington, D.C., law firm Covington & Burling, which specializes in defending businesses in regulatory matters.
The firm earned nearly $18 million last year lobbying for its corporate clients, according to the Center for Responsive Politics.
No one is suggesting Smith’s seeming conflicts make him the administration’s most corrupt member. That title clearly belonged to Scott Pruitt, who stepped down Thursday as head of the Environmental Protection Agency amid multiple probes into legal and ethical issues.
But Smith is a leading contender for “wrong man for the wrong job” honors.
The FTC is the federal government’s premier consumer watchdog agency, tackling anti-competitive, deceptive and unfair business practices across virtually all industries. It often works in conjunction with state authorities to crack down on abusive or illegal corporate behavior.
Just as the Trump administration is now weakening the Consumer Financial Protection Bureau, it doesn’t take much imagination to figure that Smith’s appointment signals a similar downshifting of the FTC’s consumer-protection activities.
Last month, the FTC announced hearings on possible changes in the agency’s “enforcement priorities” in light of “broad-based changes in the economy” and “evolving business practices.”
Among the areas the FTC said it wants to examine is “the intersection between privacy, big data and competition.” As it happens, this is something Smith kno
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Wish I had mod points for you, but you're an AC, and I'm all outta points.
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David Lazarus also penned the excellent piece on the eyewear cartel, discussed on Slashdot not all that long ago.
How badly are we being ripped off on eyewear? Former industry execs tell all [latimes.com] — 5 March 2019
Not a positive-karma move to AC copypasta the entire text of his excellent work on Andrew Smith without so much as proper attribution. Did his article float up on a beach in a bottle from the great plastic gyre? Show a little respect for a fellow traveler yanking down the pants of the circle-jerk dimw
Re:In other words, FTC settled to too little (Score:5, Insightful)
$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.
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I've also read that credit monitoring as such has very little actual value to the individual.
Credit freeze (Score:2)
I should do this with my taxes (Score:5, Funny)
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.
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Actually they only require quarterly.
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Not for W-2 employers.
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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
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For $125 You too can give up all rights! (Score:2)
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!
In other words (Score:2)
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
Blacklist (Score:3)
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.
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I also want to punish anyone who has the audacity to challenge corporations.
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Why not just pass laws that remove all corporate liability in any circumstance?
Corporations are already one step ahead of you, and they don't need the law anymore. Binding arbitration with their preferred arbitration firms.
Comment removed (Score:5, Insightful)
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"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.
credit monitoring service (Score:2)
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.
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Because they want to up sell us services we didn't want or need before all these breaches.
Exacting penance? (Score:2)
Credit Monitoring? (Score:2)
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.
Take it out of the FTC's budget (Score:2)
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.
Unprecedented (Score:2)
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 (Score:2)
Indeed. I am disappointed---in the FTC.
Or don't take the class action.. (Score:2)
Any Chance We Can Sue FTC? (Score:2)
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
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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
Line them up against a wall and SHOOT THEM. (Score:2)
Anything is better than nothing (Score:1)
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.
Too Little Money? (Score:2)
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
Welll, this is BS... (Score:3)
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.
$670M ??? (Score:2)
where does the remaining $670 million go to?