How should you take your Equifax data breach settlement?

Do you go for the free money or the free service? And what does the fine print say?

The Federal Trade Commission confirmed on July 22 that Equifax will pay as much as $700 million — and no less than $575 million — for the 2017 data breach that affected the personal information of roughly 147 million people. And in the days that followed, a question sprang up: how do you get your own piece of that action?

It’s pretty straightforward on the face of things. You can get up to 10 years of free credit monitoring or, if you already have credit monitoring (which can be gotten for free through a service like Credit Karma), you can get $125.

Most of us would probably jump for the free money, but the details are where all of this gets sticky.

On the credit monitoring side, your freebie breaks down to at least four years of three-bureau monitoring from Equifax, Experian, and TransUnion plus $1,000,000 of identity theft insurance and then up to six more years of free credit monitoring from Equifax only. If you were a minor in May 2017, when the breach occurred, you’re eligible for 18 years of free monitoring.

The free money gets even more complicated. Although the settlement sets aside $425 million to pay for anything connected to people affected by the breach, the lion’s share of that covers all the free credit monitoring. There’s only $31 million available to cover the cash payouts, so while you can receive as much as $125, that number goes down as more people sign on for the cash.

If every single one of the 147 million people affected by the data breach opted for a cash payment, each person would get $0.21 each. If only a million people go for the cash, you’re getting $31 apiece. 

Now, there are ways to get a bigger payout, but they only apply if you were directly affected by the data breach in some way. You can have various expenses reimbursed and even get paid out for the time you spent dealing with all of that hassle. It won’t apply to everyone, so you should read the FTC guidelines for the settlement if you think you might be eligible.

For everyone else, your first step is to see if you were one of the 147 million caught up in the data breach. You can do that right here. If you’re not eligible to participate in the settlement, that’s still great news. It means your personal information — including, critically, your social security number — wasn’t exposed.

If you are eligible, your next stop is the Equifax website set up for people wishing to file a settlement claim. Even if you don’t care about the cash or the free monitoring, you should go through this process. Accepting one of the settlement options means you’re waiving your right to later sue Equifax (say, if your identity is stolen). But you also waive that right if you don’t go through the claims process at all by Jan. 20, 2020.

So do the thing. Most of those affected will probably want to opt for one of the two settlement awards. But which do you choose? Free money is the easy, obvious choice. Alexandria Ocasio-Cortez tweeted as much on Friday, before the fine points of the cash settlement were fully understood. She later corrected herself.

In the end, you’re the only one who can decide which option works best for you. I can tell you that personally, once I had a better grasp on how the cash payouts might work, I went for the free credit monitoring. Free money is enticing, but even if the $125 was a guaranteed payout, that data breach still happened and my SSN is still likely out there. I’d rather have 10 years of more robust identity theft protection.

Whatever you choose, settlement benefits won’t start to be distributed until after the claims process ends in Jan. 2020. Those who opt for free credit monitoring will receive an activation code. And those who go for cash can choose between either a check or a Visa gift card.