Stories
Slash Boxes
Comments

SoylentNews is people

posted by martyb on Friday August 02 2019, @05:36PM   Printer-friendly
from the basic-math dept.

Sorry, you're not getting $125 from the Equifax settlement, FTC says

Remember that $125 you could have gotten from the Equifax Inc. data-breach settlement? Yeah, never mind.

The Federal Trade Commission announced Wednesday that, due to an overwhelming response, cash payments aren't going to be anywhere near $125 each, and urged consumers to sign up for the free credit monitoring offered as an alternative.

About 147 million people were affected by the 2017 Equifax EFX, -0.64% breach, but only $31 million was set aside for payments as part of the $700 million settlement, announced last week. A quick bit of math shows that for everyone to have gotten $125 from that pot, there would have to be only 248,000 claimants. While the FTC didn't give a number, they said there were already "an enormous number of claims filed."

"A large number of claims for cash instead of credit monitoring means only one thing: each person who takes the money option will wind up only getting a small amount of money," the FTC said in a blog post Wednesday.

"So, if you haven't submitted your claim yet, think about opting for the free credit monitoring instead," the FTC said. "Frankly, the free credit monitoring is worth a lot more."

[...] The agency noted that consumers who had to pay out-of-pocket expenses due to the breach are still entitled to reimbursement if they submit a claim, as that money comes from a separate fund.

To get more information, or to find out if your data was exposed in the breach or file a claim, go to ftc.gov/Equifax.

Another quick bit of math reveals that if every one of the 147 million people affected opted for the $125 payout, the settlement pool would have needed to contain $18.375 billion; the payout fund totaled 0.17% of that: $31 million. Putting it another way, they set aside $0.21 for each potential claimant.


Original Submission

 
This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
  • (Score: 5, Insightful) by Thexalon on Friday August 02 2019, @06:21PM (10 children)

    by Thexalon (636) on Friday August 02 2019, @06:21PM (#874764)

    Equifax's market cap is $16.71 billion. The cost of this settlement if everybody gets a payout is $18.38 billion. So what should happen is:
    1. Each victim gets as close as possible to the settlement, which works out to approximately $113.80 per person affected.
    2. Equifax files for bankruptcy. The remaining creditors get to fight over the assets.
    3. Shareholders get wiped out.

    Instead, the FTC is doing everything they can to make the outcome:
    1. Each victim gets nothing.
    2. Equifax continues business as usual, the shareholders get a nice ROI, and nobody is punished for Equifax's negligence except the victims of said negligence.

    That's not how capitalism or civil law is supposed to work.

    --
    The only thing that stops a bad guy with a compiler is a good guy with a compiler.
    Starting Score:    1  point
    Moderation   +3  
       Insightful=3, Total=3
    Extra 'Insightful' Modifier   0  
    Karma-Bonus Modifier   +1  

    Total Score:   5  
  • (Score: 3, Interesting) by AthanasiusKircher on Friday August 02 2019, @06:45PM (3 children)

    by AthanasiusKircher (5291) on Friday August 02 2019, @06:45PM (#874781) Journal

    I'm not at all defending Equifax or the FTC here (as noted in my post above).

    However, I'd just note one important caveat even listed in the summary:

    The agency noted that consumers who had to pay out-of-pocket expenses due to the breach are still entitled to reimbursement if they submit a claim, as that money comes from a separate fund.

    If I'm reading this correctly, this means if you have actually had your identity stolen and had to pay money to deal with that or if you had to pay fees for credit monitoring or even consulting an attorney about what to do, you can file a separate claim. If you have spent actual money dealing with issues because of this breach, you can still recover that, which is apparently capped at $20,000 per person [ftc.gov].

    What this $31 million that everyone is talking about is the pot of money set aside for "time spent dealing with the breach," [ftc.gov] which is basically undocumented time you may have wasted worrying about it or taking actions that incurred no cost to you. Not surprisingly, apparently a lot of people saw this as a giant pot of "free money" and filed claims for this, even if they didn't have any actual expenses.

    Now, I'll completely agree with you that the settlement should have been far higher in value and should be incredibly punitive (as I said in a post above, I think people should be in jail). And I agree people should be compensated for wasted time because of this, as well as given punitive damages for having someone handle their data irresponsibly.

    But let's be clear here that consumers who actually incurred expenses dealing with a breach of their information can recover that money... apparently. Unless that dries up too. But for now, "each victim gets nothing" is false. If you are actually a "victim" who incurred financial loss, you apparently can still be paid for that (up to $20,000). If you want to file for the free money because you wasted time dealing with this (or maybe didn't even waste time dealing with it, but are mad at Equifax or maybe because you saw an opportunity for free money), you can either take whatever 10 cents or whatever this settlement gives you, or you can take your chances suing Equifax individually in court -- but you had better have documentation of your lost time, etc.

    • (Score: 2) by SunTzuWarmaster on Friday August 02 2019, @08:54PM (2 children)

      by SunTzuWarmaster (3971) on Friday August 02 2019, @08:54PM (#874833)
      But here's the rub - I have totally spent ~9+ hours freezing and unfreezing my credit with the THREE bureaus. I've spent that much time ON TELEPHONE HOLD, alone. I paid $15/agency ($45) for the pleasure. I've documented none of it. I don't think I'm alone.
      • (Score: 3, Insightful) by AthanasiusKircher on Saturday August 03 2019, @01:58AM (1 child)

        by AthanasiusKircher (5291) on Saturday August 03 2019, @01:58AM (#874922) Journal

        Oh, I completely understand and sympathize. If you think I don't understand your plight just because I wrote a clarifying message about the details of the lawsuit, please see my recent journal [soylentnews.org] about adventures with the credit bureaus. I've spent a lot more than nine hours of my time because of this mess.

        (Sidenote: I really wish people would realize that just because someone wants to add a fact of clarification that may "count against" some outrage in another post, it doesn't necessarily mean that someone disagrees. It's a point of fact that I hoped some would find useful that people could actually get more out of this settlement. (And apologies if your post wasn't intended to make the assumption I was somehow defending terms of the lawsuit -- the repeated all caps seemed a little annoyed. I'm annoyed at the credit bureaus too.) End Sidenote.)

        Did you not keep your receipts at least for the credit freeze? I froze my credit and it was free. (Though, as noted in the above link to my journal, it has come with further costs subsequently in terms of time and effort.)

        • (Score: 3, Informative) by SunTzuWarmaster on Saturday August 03 2019, @11:00AM

          by SunTzuWarmaster (3971) on Saturday August 03 2019, @11:00AM (#875060)
          No - I'm not annoyed at you - I'm annoyed at the system. Part of this story is that I actually worked hard to have "no credit" (credit score 0) and *still* had to spend time managing my credit score to protect against fraud. This is for a system that I decided to have no interactions with (I have never paid a credit card bill).
  • (Score: 0) by Anonymous Coward on Friday August 02 2019, @06:46PM

    by Anonymous Coward on Friday August 02 2019, @06:46PM (#874783)

    Equifax's market cap is $16.71 billion. The cost of this settlement if everybody gets a payout is $18.38 billion. So what should happen is:
    1. Each victim gets as close as possible to the settlement, which works out to approximately $113.80 per person affected.

    Not that I disagree with the gist of your post, but this makes no sense. Where the heck would this cash actually come from?

    Having a market cap of $16.71 billion doesn't mean you have $16.71 billion in liquid assets, it is simply the current share price multiplied by the number of outstanding shares. The share price is just the value of the most recent trade. In your scenario, basically nobody will be buying and basically everybody will be selling, so the share price becomes bugger all, and bugger all multiplied by the number of outstanding shares gives a market cap of bugger all.

  • (Score: 2) by JoeMerchant on Friday August 02 2019, @08:10PM (3 children)

    by JoeMerchant (3937) on Friday August 02 2019, @08:10PM (#874814)

    Too big to fail is actually a thing...

    Whatever moron came up with $125 per claimant needs to be disbarred.

    Also telling: $31M for the claimants but the total settlement is over 22x that large, meaning that the lawyers decided that the 147 million affected parties are only due 4.4% of the settlement - guess who gets the rest?

    As long as we let lawyers write our laws, the Ouroboros will continue to eat itself, and us along with it.

    --
    🌻🌻 [google.com]
    • (Score: 2) by AthanasiusKircher on Saturday August 03 2019, @02:27AM (2 children)

      by AthanasiusKircher (5291) on Saturday August 03 2019, @02:27AM (#874933) Journal

      Also telling: $31M for the claimants but the total settlement is over 22x that large, meaning that the lawyers decided that the 147 million affected parties are only due 4.4% of the settlement - guess who gets the rest?

      As I noted in a comment above (and was noted by another commenter in this thread), there is apparently another pot of money over four times as large as the $31 million that can go to people who actually incurred expenses related to the breach (including fees for credit freezes, credit monitoring, costs in losses due to identity theft/fraud, etc.). The $31 million is simply a pot for claims for "time" that consumers wasted dealing with this situation, which I gather doesn't require things like receipts or whatever for actual expenses. It's still not enough of an overall piece of the settlement money compared to the legal fees, etc., but it is significantly more than 4.4%.

      Or, to be more clear: if you didn't incur financial lose due to this breach, you apparently might get $1 or less or something. If you did incur financial loss, you can file claims and should get that reimbursed (capped at $20,000/person in the class action).

      To be honest, I'm rather frustrated at some of the news coverage of this stuff recently, as it may be dissuading people who actually incurred expenses from filing for relief they may be due. For people with no documented expenses, however, they will basically be out of luck unless they want to take their own case to court against Equifax.

      • (Score: 2) by JoeMerchant on Saturday August 03 2019, @03:39AM (1 child)

        by JoeMerchant (3937) on Saturday August 03 2019, @03:39AM (#874968)

        4.4% * 5 is still too small for "people" vs lawyers, unless you're a lawyer.

        --
        🌻🌻 [google.com]
        • (Score: 0) by Anonymous Coward on Saturday August 03 2019, @04:55PM

          by Anonymous Coward on Saturday August 03 2019, @04:55PM (#875191)
          How many will actually have financial losses due to breaches though? I'm talking about fraud and similar. Not OMG I spend 9 hours talking to people.

          That said I'm not even sure why someone's reimbursement for losses should be capped by this class action. Unless it's some easier payment scheme where you don't have to spend as much time in court etc to claim your "up to $20,000".
  • (Score: 0) by Anonymous Coward on Friday August 02 2019, @11:51PM

    by Anonymous Coward on Friday August 02 2019, @11:51PM (#874892)

    From the evidence of this being the only outcome *ever* in cases like this, I'm pretty sure that is exactly how capitalism is supposed to work. Fairy tails to the contrary are just to placate the plebs.