Remember the news that victims of the Equifax hack might get $125 from a class action settlement, only to hear later the real amount would probably be a few pennies? And getting those pennies required a bunch more paperwork steps? And the lawyers who negotiated the settlement were going to get millions of dollars? ($77 million actually, and they just asked for more).
Consumers do have the right to object to all this, but that deadline is fast approaching — it’s November 19.
Objecting isn’t’ hard: It’s as simple as sending a letter to the Equifax Data Breach Class Action Settlement Administrator. Instructions are available at the Equifax Breach Settlement website on its FAQ page. Look for item No. 25.
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But Reuben Metcalfe, founder of Class Action Inc., has made it even easier. He recently launched a website named NoThanksEquifax.com which has a bot that semi-automates the objection letter-writing process. Be warned: The bot, dubbed Clarence, also has a sense of humor. He cheers you on as you walk through the steps of filing an objection. Metcalfe’s first working name for the service was as an “Equifax F.U. Button.”
The site is no joke, however. The judge overseeing the case must legally consider all objections at a fairness hearing scheduled for Dec. 19. Objections do not remove consumers from the class; if the settlement is approved, they can still receive payment or credit monitoring services offered to other class members. The NoThanksEquifax bot also helps consumers opt-out, or file a claim, for free.
Metcalfe, who runs a service that helps consumers file for class action payments in exchange for a percentage, says he created the site because he thinks the terms of the Equifax settlement are unfair. He also thinks most consumers are unaware that they have rights at this stage of the settlement process, and he hopes the site will call attention to the objection option. He thinks massive objections or opt-outs would force negotiations to come up with a better deal for consumers.
“I believe a mass opt-out campaign for the Equifax settlement could result in an additional $2 to $3 billion in… consequences,” he told me.
If this story sounds a bit familiar, that’s because it is. Lawyers and regulators have spent the better part of a decade trying to figure out what are fair consequences for companies involved in data breaches. There’s no easy answer. Generally, victims who win lawsuits are compensated based on the amount of identifiable harm they can prove. Usually, the formulas are specific — “This injury forced me out of work and I lost $40,000 in wages.” But with data hacks, it’s harder to identify current harm, and basically impossible to predict future harms. The Equifax settlement, and other cases, have included provisions that compensate victims when they can prove fraud or expenses that resulted directly from a hack. They generally also offer free credit monitoring for a year or two. That’s often a token gesture — at this point, after so many breaches, many consumers have multiple overlapping offers of credit monitoring.
Two recent data breach class action settlements have followed this familiar pattern. In October, lawyers announced settlement of the massive Yahoo data breach. Consumers can file for a $100 cash payout, but the check that comes might be much smaller, depending on how many consumers file — similar to the Equifax case.
At about the same time, a settlement in the seemingly ancient Zappos hack case also announced. Criminals took less important data in that case, but the settlement is still not very consumer friendly. Customers received a 10% off coupon from the site. Lawyers are set to receive $1.6 million.
Anything that calls continued attention to the Equifax case is worthwhile. The court filing that saw plaintiff’s lawyers up their request for compensation also revealed that, while nearly about 150 million Americans were impacted by the massive data heist, only 3 million consumers have so far signed up for the offer of free credit monitoring the firm is giving out as part of the settlement. Consumers have until January 22 to file a claim.
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