Equifax was hit with a massive data breach that affected up to 143 million American’s. Bloomberg reports that a class lawsuit is already being prepared against Equifax, for up to $70 Billion. A couple of people from Oregon retained hotshot lawyers to litigate/settle the case.
Equifax knew and should have known that failure to maintain adequate technological safeguards would eventually result in a massive data breach. Equifax could have and should have substantially increased the amount of money it spent to protect against cyber-attacks but chose not to.
So if there were 143M people affected, and they settle for $70B, we’ll each get $489.50, right (70,000,000,000 ÷ 143,000,000)? At least that would be a silver lining, no?
No, not at all. For three reasons, we won’t be walking away with that amount of money:
- First, this is just a number being thrown out by the lawyers. In all likelihood it won’t materialize.
- Second, presumably, the $70B includes the lawyer fees and other costs. I’m not sure how much to knock off for that, but probably a significant amount.
- Finally, Equifax only has assets of around $6B and market cap of around $17B, so I don’t see how they’ll actually be paying that amount, even if the court would obligate them. Company would bankrupt before that point.
It’s interesting that a couple of people jumped to file the class lawsuit. I assume their thinking is that they’ll be eligible for more compensation as is typically the case with class settlements that the official plaintiffs get more. In this case it seems a bit odd since they weren’t whistleblowers of any sort, just names on the paper.
Important note: it’s already been discussed that if you sign up for the one-year free Equifax credit monitoring offer, you might lose out on your right to any class settlement, so I’d hold off on that for now. I imagine they’ll take that clause out eventually after the uproar.
In conclusion, let me just make clear that I am no more knowledgeable about class lawsuits than anyone else, but it’s fun to talk about! Chime in below if you know more.