Equifax data breach: Fund to compensate victims set to run out
Regulators in the US are urging consumers to opt for free credit monitoring instead of cash because a $31m fund may run out.
Thursday 1 August 2019 09:57, UK
Consumers rushing to collect $125 (拢103) in compensation from Equifax after a major data breach could be disappointed, US regulators have warned.
The credit referencing agency, which lost the details of 147 million people in 2017, had reached a settlement with the Federal Trade Commission (FTC) of $700m (£577m).
Up to $425m (£350m) of this is being put into funding credit monitoring services for victims - but $31m (£25.6m) cash has also been put aside for affected customers who already have credit monitoring.
There were plans to award $125 (£103) to those who chose the latter option, but the FTC has warned that an overwhelming public response to the settlement means that the $31m likely won't be enough to go round.
As a result, the amount each person gets will drop as the pool of money is distributed proportionally.
In a warning published on Wednesday, the FTC urged eligible claimants to apply for credit monitoring instead.
"Because the amount of money set aside for the cash payment option is capped at $31m (£25m) consumers who select that option may not receive the $125 (£103) they had expected," the regulator added.
Only consumers in the US are able to claim the compensation from Equifax.
Some could be eligible for compensation of up to $20,000 (£16,500) if they can prove that they were defrauded as a result of the data breach.
An estimated 15 million people in the UK were affected - equivalent to just under a quarter of the entire population.
Equifax was fined £500,000 by the UK's data regulator the Information Commissioner's Office (ICO) over the breach.
The ICO slammed the company for failing to pay attention to a "critical vulnerability" warning it had been issued two months before the hack by the US Department of Homeland Security.