Think Twice, Be Cautious Before Filing Claims Related to the Equifax Data Breach by Joanie B. Stein, CPA
Posted on August 12, 2019
If you are among the more than 145 million people whose personal information was compromised in the Equifax data breach that occurred in 2017, you may now be entitled to compensation as part of the credit bureau’s nearly $700 million settlement with the government. However, before you file a claim or try to figure out if you even qualify for restitution, be aware that criminals are already hard at work using the settlement as a basis to scam you into sharing your personal data and allowing them to steal your identity.
Under the terms of the settlement agreement, individuals who suffered specific financial losses as a result of the original breach in 2017 may file claims to receive restitution of up to $20,000 per person only when they can provide supporting documentation to substantiate those losses and any related out-of-pocket costs they incurred. The majority of consumers will instead qualify for either free credit-monitoring services or a one-time cash payment. Based on the overwhelming initial public response to the settlement, the FTC warns that the actual cash payout will be a fraction of the maximum $125, and the agency is encouraging consumers to instead select free monitoring service, which also includes $1 million of identity theft insurance.
To receive restitution in any form, consumers must file their claims before Jan. 22, 2020, on the official settlement website at https://www.equifaxbreachsettlement.com, which is managed by the settlement administrator. But first, prospective victims must determine if they were, in fact, affected by the data breach and qualify as a settlement class member by entering their last name and last 6 digits of their social security number.
Here’s where things can get tricky.
For one, many consumers have already reported problems entering their information on the official claim website. Secondly, in the wake of the original breach two years ago, Equifax set up a dedicated website for consumers to use to determine if their personal data was compromised. Criminals quickly set up look-alike websites with domains such as “equihax.com” to trick consumers into turning over their personal data. At the same time, various browsers flagged the official website set up by Equifax as a phishing threat.
While it is possible to deal with glitches on the claims website by exercising patience or trying again at another time, it is far more difficult to identify and counteract the various scams that criminals have already set up to take advantage of the settlement agreement and gain access to your personal information.
To File a Claim or Not
If you are hoping to receive a piece of the Equifax settlement, you should first consider the value of the payout you may actually qualify to receive based on your unique situation and weigh that against the risks for which filing a claim can expose you. For example, if you did not incur financial losses as a result of the original breach, is it worth your time to file a claim online and possibly expose your personal information to criminals in return for a payout of $5? Alternatively, ask yourself if the value of free credit monitoring services is worth the effort to file a claim, especially when there are free tools available to protect yourself from future breaches and identify theft.
According to fraud experts, the best way to safeguard your data is to contact each of the credit reporting agencies and request a free credit freeze, also known as a security freeze. Essentially, a freeze blocks potential creditors from pulling your credit file and granting credit or loans to you (or criminals posing as you) unless you specifically request to unfreeze your file, which you can also do without incurring any fees. As added levels of protection, you can annually receive a free copy of your credit report from each of the reporting agencies, and you may set up various credit monitoring and fraud alerts for no fee through your credit card company.
If you decide that it is in your best interest to file a claim related to the Experian settlement, be aware of the following red flags to help you stay safe:
Red Flag No. 1: The web address is missing an “S” for security or it has a typo
Every time you visit the settlement website, click on a link or you are directed to a different webpage, check the address/URL to ensure it starts with https:// (and not http://), with the s representing an added level of security. You should also look at the address to confirm it is properly spelled. One mistyped letter can take you to any number of fake websites that fraudsters have already created to infect your computer with malware.
Along the same line, do not attempt to access the official claims websites by clicking ads or links on third-party websites or other unverified sources. Instead, go directly to the official website by manually typing the correct URL into your browser. Before you enter your personal information, carefully confirm the address in your browser window to make sure you are at the right place.
Red Flag No. 2: You receive a phone call or email encouraging you to file a claim
Neither the FTC, Equifax nor the settlement administrator will call or email consumers directly about filing claims. The only way you can participate as a member of the class settlement is for you to proactively call the settlement administrator at 1-833-759-2982 or visit the official claims website or the FTC website at https://www.ftc.gov.
Red Flag No. 3: You are asked to pay a fee
At no time during the claims process will consumers be required to reach into their own pockets to pay a fee. Determining your eligibility, filing a claim and receiving restitution are free to you, as is a credit freeze and annual access to your credit file. Never provide credit card or other financial account information over the phone or via email to anyone you do not know personally.
About the Author: Joanie B. Stein, CPA, is a senior manager with Berkowitz Pollack Brant’s Tax Services practice, where she works with individuals and closely held businesses to implement sound strategies that are intended to preserve wealth and improve tax-efficiency. She can be reached at the CPA firm’s Miami office at (305) 379-7000 or via email at firstname.lastname@example.org.
Information contained in this article is subject to change based on further guidance issued by the FTC.