The FTC says free credit monitoring could provide a value of hundreds of dollars, but some question the wisdom of getting it through Equifax. And some experts say credit monitoring is less effective than freezing your credit.
If you are one of millions of Americans who will be filing a claim in the settlement related to the infamous 2017 Equifax data breach, the Federal Trade Commission has some advice for you.
The government agency is recommending that you choose free credit monitoring over a potential $125 cash settlement. Considering that the Equifax breach exposed the data of 147 million people, millions of people could be filing claims.
You could get considerably less than the anticipated $125
However, the money allotted to this payout settlement is fixed at $31 million. That means if too many people opt for this payout option, you may end up with a payout that’s considerably lower than $125. (CNBC reports that those who choose the cash payout also have to verify their claim by an Oct. 15 deadline. You must also indicate what credit monitoring service you use and certify you’ll keep it for at least six months.)
“Frankly, the free credit monitoring is worth a lot more – the market value would be hundreds of dollars a year,” Robert Schoshinski, assistant director for the FTC’s division of privacy and identity protection, wrote in a July 31 blog post.
Not only that, this settlement offering would be likely better than any credit monitoring you currently have, since it will monitor your credit report with Equifax, TransUnion and Experian. It also offers up to $1 million toward identity theft insurance and “individualized identity restoration services.”
See related: Main lesson after Equifax breach: Protect yourself
Consumers question adequacy of settlement amount
The FTC’s advice has unleashed a flood of consumer commentary at the agency’s website, with a number of people questioning the adequacy of the amount Equifax has set aside for the payouts.
For instance, “PB” says, “It seems to me as if you let Equifax off easily on this problem. Why should I opt for free credit monitoring when I already monitor my credit for free? The [money] set aside for the cash settlement was too small. It seems to me that once again, big business is given more consideration than the average consumers impacted by this breach.”
There are also those who question the wisdom of signing up for free credit monitoring from Equifax, the company responsible for this mess to begin with.
Commenter “just me” noted, “In fact, the credit monitoring I had (until recently) *was* Equifax, which is why I find myself in this fix to begin with! So no thanks, give me my $125 and let me be on my way before anything else happens.”
Ted Rossman, CreditCards.com’s industry analyst, also isn’t in favor of opting for the credit monitoring.
“Personally, I’d go for the cash, even if it’s barely enough for a sandwich,” Rossman said. “There are lots of ways to get free credit monitoring elsewhere. Credit card companies such as Chase and Capital One offer it – even before Capital One’s breach – plus websites such as Bankrate.com.”
He adds, “Free credit monitoring just tells you there was a problem, it doesn’t prevent it from happening. That’s why I prefer a free credit freeze as a more proactive way to guard against identity theft.”
See related: Credit monitoring: When is it worth paying for?
Already submitted a cash claim? Here’s how to get credit monitoring instead
If you’ve already submitted a claim for a cash payment in this settlement, you should be getting an email from the settlement administrator. This communication will ask for the name of your current credit monitoring service.
At this point, you will have the chance to opt for the free credit monitoring option. The email will also tell you how to proceed after that. The claims website is also being updated with this information.
There will not be any financial payout impact for the people who used their personal funds to mitigate the impact of the breach by paying for credit freezes, for instance, or engaging someone to manage identity theft issues. There’s separate funding available, up to $20,000 per individual, for those sorts of payouts. Make sure you provide sufficient documentation when you submit this claim.
The FTC has also provided input on other common questions related to this breach.