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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.

Sign with logo and a portion of the main building are visible at the headquarters of credit bureau Equifax in downtown Atlanta, Georgia, September 20, 2017. In September of 2017, a data breach at Equifax exposed the personal information of thousands of customers. (Photo via Smith Collection/Gado/Getty Images)
Image: The cash fund to compensate Equifax consumers is set to run out
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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.

Close-up of the hand of a man holding a mobile phone open to the web site of credit bureau Equifax, with text on the website reading "Equifax Cybersecurity Incident", providing steps for consumers to take following a security breach at the company, San Ramon, California, September 28, 2017. (Photo by Smith Collection/Gado/Getty Images)
Image: Equifax lost 147 million people's details in 2017

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.

More on Equifax

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.