Equifax Data Breach Settlement Changes the Landscape of Possible Consumer Remedies
In 2017 the credit bureau Equifax suffered a massive data breach that exposed the personal information of over 147 million customers. Finally on July 22, 2019 a federal court approved a settlement ordering Equifax to pay over $650 million to consumers affected by the data breach. The breach occurred due to a flaw in an internal tool designed to build web applications for the company. Equifax actually knew of the flaw two months before it discovered the data breach on July 29, 2017. After diving into the investigation further the company discovered there were actually a series of small data breaches from May 13 through July 30th of the same year.
According to the Federal Trade Commission (FTC), the settlement includes offers to consumers for four years of free credit monitoring as well as seven years of free assisted identity restoration. The most notable piece of this settlement is the provision set aside to give individual consumers up to $20,000 for any losses or fraud caused by the breach including out-of-pocket expenses and time the consumer spent (at $25 an hour up to 20 hours) dealing with the breach. This is groundbreaking because it is the first settlement that actually places a dollar value on the consumer’s time. While this move does not create legal precedent, like a judgment or a court opinion, Equifax has now created an expectation for consumers injured in a data breach and this will likely affect how settlement negotiations occur in future cases.
Additionally, this settlement adds to the trend for more consumer protection and greater responsibility for companies when it comes to data breaches. We will likely see more and more legislators and the FTC bulk up cybersecurity requirements for companies housing sensitive consumer data. We will also likely see an increase in hack attempts and the target companies will have to continue to pour more resources into fending off these attacks.
As of now, affected consumers are not able to file a claim for a piece of the settlement funds. According to the FTC, you can sign up for e-mail notifications on the development of the payout of the Equifax settlement on the FTC’s website.