Class Action Settlements Drive $1 Billion in
Equifax Business Practice Reforms and over $500 Million in Consumer
Relief
In a historic victory for U.S. consumers, credit reporting firm,
Equifax (NYSE: EFX), has agreed to settle a nationwide class action
stemming from one of the most notorious data breaches in U.S.
history. The massive 2017 breach, which exposed the Social Security
numbers, birth dates, addresses and, in some cases, the driver’s
license and credit card numbers of over 147 million consumers, was
resolved in a settlement valued at over $1.5 billion.
The class action settlement includes up to $505.5 million to pay
benefits for cash compensation including time spent dealing with
the breach, credit monitoring, and assistance with identity
restoration. Equifax may have to pay substantially more if greater
than 7 million class members enroll in credit monitoring. The
settlement also mandates an overhaul of Equifax’s business
practices—including its handling of the personal information of
consumers nationwide—and requires Equifax to spend at least $1
billion over the next five years to overhaul its data security. The
value to the class is even larger. The retail cost of purchasing
the same credit monitoring services for the entire class alone
would exceed $282 billion.
In January 2019, plaintiffs defeated Equifax’s motion to dismiss
the litigation, with U.S. District Court Judge Thomas W. Thrash,
Jr. finding that Equifax owed a duty of care to safeguard the
personal and financial information in its custody. The Court noted
that to hold otherwise would create a “perverse incentive” for
businesses that profit off of the use of consumers’ personal data
to turn a blind eye and ignore known security risks. This ruling
prompted further efforts to resolve the litigation, which began
nearly at the same time the case was filed.
“We knew that we wanted to resolve the case as soon as possible
for the highest possible consumer relief,” said Norman Siegel of
Stueve Siegel Hanson LLP in Kansas City, who served as chair of the
settlement committee and was appointed by the court to lead the
class action along with Ken Canfield of Doffermyre Shields Canfield
& Knowles LLP in Atlanta and Amy Keller of DiCello Levitt
Gutzler LLC in Chicago.
Joined by Roy Barnes, the former governor of Georgia and
principal of the Barnes Law Group, along with nine other of the top
data breach and class action attorneys in the country, this team
negotiated a binding agreement with Equifax on March 30, 2019, and
committed to working with States Attorneys General, the Consumer
Financial Protection Bureau (CFPB), and the Federal Trade
Commission (FTC), to consider ways to strengthen the
settlement.
“The regulators were helpful in the process and secured
additional relief for consumers—such as an additional year of
credit monitoring and up to $195 million more in the settlement
fund,” said Keller, who at 34 became the youngest woman to ever
lead a nationwide multidistrict litigation when she was appointed
co-lead counsel in this case. “We are grateful that they worked
with us to ensure the best possible outcome for consumers.”
The final details of the settlement were made public today (July
22, 2019), after securities filings and Equifax’s CEO previously
hinted at a global resolution.
The Consumer Restitution Fund will be used to pay various
benefits to those impacted by the breach including reimbursement
for up to $20,000 in out-of-pocket losses; reimbursement for up to
20 hours of time spent dealing with issues relating to the data
breach at $25 per hour; a minimum of four years of free,
three-bureau credit monitoring through Experian, or a cash payment
up to $125 for individuals who already have different credit
monitoring; six additional years of single-bureau credit monitoring
provided free-of-charge by Equifax; and up to 25% reimbursement for
credit or identity monitoring subscription products purchased from
Equifax between September 7, 2016, through September 7, 2017.
The settlement will also provide all individuals affected by the
breach with Identity Restoration Services, including access to a
U.S.-based call center providing services to help class members
remedy fraud or identity theft, or identity restoration for seven
years. Identity Restoration Services will be available to everyone
in the class —regardless of whether or not they submit a claim.
“Navigating complex financial systems when you’ve been the
victim of identity theft is a cumbersome – and, in some instances,
insurmountable – task for consumers,” Keller added. “We hope that
our settlement gives them the assistance and peace of mind they
need to move on from this incident.”
“This is a settlement with real teeth, as it not only provides
substantial relief to those consumers whose lives have been
disrupted by the data theft, but it also ensures Equifax will
dramatically improve its security practices moving forward,”
Canfield said. “It required close collaboration between private
citizens and their counsel and public officials and regulatory
bodies to make this settlement a reality, and it’s a great example
of the type of concerted effort it will take to advance
cybersecurity in this country.”
In addition to spurring national litigation, the Equifax data
breach stunned U.S. consumers, legislators, and regulators alike,
igniting fears that if Equifax, which has long handled consumers’
most sensitive personal information, was susceptible, then no
organization is beyond the reach of cybercriminals. The breach
launched a national conversation about consumer privacy, corporate
responsibility and the need to strengthen cybersecurity programs
nationwide.
“While this settlement cannot come close to righting all of
Equifax’s wrongs, it is a critical first step toward making it
right, compensating victims and ensuring that in the future,
companies do everything in their power to prevent this type of
catastrophic breach,” said Gov. Barnes.
The nationwide settlement looms large against a backdrop of
Congressional inaction around data privacy. While members of
Congress have deemed the Equifax breach “entirely preventable” and
sharply rebuked Equifax executives for failing to protect personal
data and demonstrating utter “neglect of cybersecurity,” it has
been largely left to the American court system to hold
organizations accountable for their inattention to cybersecurity
practices of corporate America.
“While we know that there are many members of Congress who are
making privacy and cybersecurity a priority, the absence of any
meaningful federal legislation that would hold companies
accountable for egregious cybersecurity lapses like the one we saw
in Equifax is unfortunate and is precisely why consumers must be
empowered to directly challenge negligent organizations like
Equifax,” Siegel said. “This settlement sends a clear message that,
if real change is going to happen relative to data security, the
American people are going to have to push hard for it.”
The MDL is In re: Equifax Inc. Customer Data Security Breach
Litigation, case number 1:17-md-02800, in the U.S. District Court
for the Northern District of Georgia.
About Barnes Law Group
Anchored by Georgia’s former Governor Roy E. Barnes, the Barnes
Law Group (“BLG”) is a law firm based in Marietta, Georgia with a
national distinction for its skill and advocacy in consumer
matters. BLG’s legal team is comprised of experienced and dedicated
lawyers and staff who have devoted decades in the public and
private sectors to “Making It Right” for those who have been
wronged. www.barneslawgroup.com
About DiCello Levitt
DiCello Levitt combines excellence in commercial litigation,
class action litigation, mass tort litigation, catastrophic injury
litigation, medical malpractice litigation, and civil rights
litigation. Practicing nationwide—and internationally—from offices
in Chicago, Cleveland, New York, and St. Louis, it is an
aggressive, attentive, and creative plaintiffs’ firm whose work
speaks for itself—billions of dollars in recoveries in some of the
highest-profile matters in U.S. history. www.dicellolevitt.com
About Doffermyre Shields Canfield & Knowles
Doffermyre Shields is an Atlanta law firm founded in 1990 with a
national practice known for its work on behalf of plaintiffs in
complex civil litigation and class actions, including many of the
nation's landmark cases over the last two decades.
www.dsckd.com.
About Stueve Siegel Hanson
Stueve Siegel Hanson is a Kansas City, Missouri based law firm
representing businesses and individuals in high stakes litigation
nationwide on a contingency basis. The firm is one of the
preeminent plaintiff's trial law firms in the nation, known for its
high-stakes, landmark verdicts and settlements in significant
individual and class action litigation. Since its establishment in
2001, the firm has led some of the most complex and high-profile
cases in state and federal courts throughout the United States,
recovering billions in verdicts and settlements.
www.stuevesiegel.com
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