You Won't Get $125 From Equifax: FTC Admits Penalty Fund Is Way Too Small

The FTC has issued a statement warning consumers impacted by the Equifax security breach that they won't receive the $125 cash payments available to claim. The reason, the FTC says, is due to the relatively small $31 million 'pot of money' set aside for these claims under the company's settlement with the agency. As more people claim the cash payout, the smaller those payouts will ultimately be.

Equifax reached a settlement with the FTC last week over the massive data breach the company announced in September 2017. Around 147 million people were impacted by this security issue, potentially leaving them open to identity theft. Under the settlement, consumers exposed by the breach are offered either free credit monitoring or a $125 cash payment.

Anyone can check whether they are eligible to make a claim here. The $125 cash payment is offered to individuals who already have a credit monitoring service; those who don't can instead sign up for the free monitoring. Alternatively, the settlement offers reimbursement for individuals who have had to pay out of pocket to deal with the ramifications of the security issue.

In a statement on July 31, the FTC warned that the cash payments made to consumers will be smaller than $125 if too many people claim the cash instead of the free credit monitoring. The agency doesn't provide an estimated figure, however, given the huge 147 million people impacted versus the $31 million earmarked, the payments could end up being quite small.

The FTC tries to encourage consumers to choose the credit monitoring by pointing out that its value eclipses $125 — if purchased, this monitoring would cost 'hundreds of dollars' per year, the agency claims. The monitoring includes up to $1 million in restoration services and identity theft insurance.