Last week, Equifax agreed to pay nearly $700 million to settle federal and state investigations into how it handled a massive 2017 data breach that affected more than 50% of Americans.
Under the terms of the settlement, those who had their data hacked are eligible to receive up to 10 years of credit monitoring or $125 if they’ve already signed up for a credit monitoring service. (You can use this online tool to see if you’re impacted by the breach.)
“There should be no reason whatsoever not to file, especially the basic claim — the credit monitoring — or if you have credit monitoring, the claim for $125,” says Jack Gillis, executive director of the Consumer Federation of America. The process is very easy and doesn’t take a lot of time.
But is it a better deal to request the cash or sign up for credit monitoring? Before you decide there are a few things you should consider:
What is credit monitoring?
Credit monitoring is a service that alerts you when there are any changes to your personal information or new credit inquiries. This can include normal updates, such as changing your address when you move, to potentially fraudulent activity, such as someone opening up a credit card in your name.
Credit monitoring generally just provides an alert, so it’s up to you to investigate what’s going on. It can’t prevent identity theft or credit card fraud, nor does it prevent scam emails or phone calls.
In the face of so many data breaches and identity theft cases, some companies, such as credit card providers, have rolled out more robust services for their users. These include identity theft monitoring and protection, which watch for suspicious or fraudulent activity involving your identity and could even help you recover any money lost because of a hack.
How do you know if you already have credit monitoring?
You might already be using a site that offers credit monitoring. It’s a popular service that many websites and apps offer alongside free credit scores. If you get alerts or emails about activity related to your credit cards or loans, then you probably have some kind of monitoring in place.
Here are some popular websites and apps that offer free credit monitoring:
Keep in mind that these free services may not be as comprehensive as the credit monitoring offered by the Equifax settlement. Mint, Credit Journey and MyCredit Guide, for example, only monitor your TransUnion credit report, rather than all three credit bureaus.
There are also a number of paid financial services that offer more in-depth credit monitoring. Here’s a look at some of the most popular paid services, all of which have a monitoring component.
If you want the most comprehensive coverage, it might make more financial sense to sign up for the free monitoring offered by the Equifax settlement, as opposed to the $125 payout. It’s a good value: A year of Mint’s paid Credit Monitor service, which includes surveillance on your report from all three bureaus, is over $200 out-of-pocket. Over 10 years, you would spend $2,000 on the service.
How to file a claim
The online claims process is now open. To get your $125 or sign up for additional credit monitoring, you can file a digital form or print one out and send it in.
But if you think it’s too good to be true, you may be right. Of the $700 million settlement, only about $425 million is allotted for consumer claims and reimbursement. Experts have noted that of the consumer funds, there’s only about $31 million set aside for the $125 cash payments.
That means if more than 248,000 people file for the $125 cash claim, then the amount Equifax pays out to each person could decrease. More than 150 million Americans were impacted by the breach.
Still, it’s worth filing a claim with Equifax, because if fewer people file a claim, each payout may be more. The deadline to submit a claim is January 22, 2020, so the full details of how much the individual payments will be may not be available until next year.
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Don’t miss: You can now submit a claim for the $700 million Equifax data breach settlement—here’s how
A monitor displays Equifax Inc. signage on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Sept. 8, 2017.
Michael Nagle | Bloomberg | Getty Images