Equifax settles class action lawsuit over 2017 hack for $380.5M
The long-running saga that followed the historic 2017 hack of credit reporting agency Equifax Inc. is nearing its end as a court in Georgia ruled Monday that the company will pay $380.5 million to resolve all outstanding claims.
The upfront figure, a partial discount on the up to $700 million figure the company agreed to pay in July, covers a class action lawsuit filed by those who had their data stolen.
Under the terms of the lawsuit, Equifax will place the $380.5 million into a fund where those affected and are party to the class-action lawsuit can withdraw up to $20,000. Equifax may also be required to add $125 million to the fund for out-of-pocket claims. Lawsuit claimants are also entitled to 10 years of free credit monitoring or cash compensation if they already have a credit monitoring service.
There were approximately 15 million members of the class action lawsuit as of December out of 146.6 million victims.
In addition, the settlement requires Equifax to pay at least $1 billion for improved data security and as much as $2 billion depending on the number of credit monitoring claims, Bloomberg Law reported.
Although the headline figure may seem low, Equifax’s costs are far higher again. As is typical in legal cases in the U.S., the lawyers are the biggest winners, with the class action lawsuit counsel awarded both $77.5 million as a percentage based fee along with $1.4 billion in litigation expenses.
The $1.4 billion paid to the lawyers places the settlement in the top five most expensive legal cases in U.S. history and possibly the most expensive legal fee in history in a case that was never seriously disputed in court.
Sordid doesn’t fully describe the hack of Equifax, which ended up with the majority of adult American citizens having their credit rating histories stolen.
The story started with Equifax disclosing a hack in September 2017, when the company initially claimed that the records of 143 million people had been stolen. That figure was raised several times since then. Of the 146.6 million individuals who had data stolen, almost all of them had Social Security numbers exposed. Some 99 million saw their address information exposed, 20.3 million had phone numbers revealed and 17.6 million people’s driver’s licenses were breached.
Along the way, it was disclosed that not only was Equifax aware of the hack sometime before disclosing it but top executives also illegally sold shares based on the information. That resulted in former Equifax Senior Vice President Jun Ying being jailed for insider trading in June.
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