A $1.38 billion settlement has been reached to resolve the Equifax data breach class action lawsuit filed on behalf of victims of the 2017 data breach that affected 147 million Americans and 15.2 million individuals in the United Kingdom.
The settlement was given final approval by a court in the Northern District of Georgia on Monday, January 13, 2020. Class members will be able to claim up to $20,000 to cover out-of-pocket losses. $380.5 million will be paid to resolve the lawsuit and an additional fund of $125 million will be made available to cover certain out-of-pocket losses if required. Equifax must also invest $1 billion in data security measures.
In addition to claiming for losses, individuals affected by the breach will benefit from 10 years of free credit monitoring services, including 4 years from Experian and TransUnion and a further 6 years from Equifax. If class members have already arranged credit monitoring services, they will be able to claim a cash reimbursement to cover the costs of the services they have already paid for. Depending on the number of credit monitoring claims, Equifax may be required to make up to $2 billion available to cover the costs, so the cost could rise to $3.8 billion.
$175 million must also be paid to 48 states, a $100 million civil monetary penalty must be paid to the Consumer Financial Protection Bureau (CFPB). The total cost of the settlement is $1.38 billion, plus a further $2 billion is possible to cover credit monitoring costs. The total cost of the compensation package is expected to be around $700 million. However, there are caveats, which will limit the amount the Equifax will have to pay.
In order to make a claim, victims of the data breach must be able to prove they have incurred losses such as unauthorized charges to their accounts and the costs they have incurred from placing credit freezes on their accounts or paying credit monitoring and legal services. Class members may also claim for the time they have spent dealing with the fallout from the breach at $25 per hour up to a maximum of 20 hours. However, that time must be justified, and claimants must detail the actions they have taken on their claims.
These somewhat onerous requirements will make the claims process slow and class members only have until January 22, 2020 to submit their claims – 9 days from the date the settlement was finalized.