Even if Equifax doesn’t give you $125, cash may still beat credit monitoring


People affected by the Equifax data breach shouldn’t opt for free credit monitoring instead of a cash payout some experts say — contradicting what U.S. regulators are encouraging.

Under a settlement between the credit rating firm and the Federal Trade Commission, consumers whose information was exposed can submit a claim for up to $125 or up to 10 years of free credit monitoring. The 2017 Equifax breach exposed personal information of 147 million people, including 15 million Californians.

Because so many people have been filing claims for the cash, the payout is expected to be far less than $125 per person — perhaps less than $10. That’s because, out of the overall $700-million settlement, “the pot of money that pays for that part of the settlement is $31 million,” Robert Schoshinski, an assistant director at the FTC, wrote in a blog post Wednesday.


“If you haven’t submitted your claim yet, think about opting for the free credit monitoring instead,” Schoshinski wrote. “Frankly, the free credit monitoring is worth a lot more — the market value would be hundreds of dollars a year.” People who have already chosen the cash option will be contacted and given a chance to change their minds, he added.

But some experts said consumers can obtain free credit monitoring from various sources and that a better approach is to use a credit freeze.

Credit monitoring alerts people when there are changes in their credit reports that could signal fraudulent activity has occurred. A credit freeze, in effect, blocks applications for new credit in your name until you lift the freeze, so no one would be able to tap your credit if your identity was stolen.

“The right thing to do is get a credit freeze,” said Ed Mierzwinski, federal consumer program director at the U.S. Public Interest Research Group. “Credit monitoring only tells you if your credit report has changed already, maybe because you’re a victim of identity theft. The horse already has left the barn.”

Ted Rossman, an analyst with, agreed. “I would just take whatever [cash] payout they give” and get a credit freeze, he said. “I don’t really value the credit monitoring.”

A freeze “effectively prevents someone else from opening credit in your name, so they can’t get a new car loan or any loan posing as you,” Rossman said.


In addition, credit monitoring is free from many sources, including certain credit-card companies and websites such as and, a sister site to

One major bank, Capital One, this week also reported a data breach that affected 106 million people in the United States and Canada, and it’s also offering free credit monitoring to those people as part of its response.

But Linda Sherry, director of national priorities at Consumer Action, said the credit monitoring offer is “the best available advice” at this point even though “we’re not big fans of credit monitoring.”

She noted that with a credit freeze, the onus is on the consumer to freeze and unfreeze their credit. If the cash payout in the settlement “seems paltry, why not take the credit monitoring?” she said.

“Go ahead and claim the $125” and then “watch for an email from the settlement administrator” that provides an option to choose credit monitoring instead, she said. And make sure to read any fine print. “You just want to be sure that ... you don’t waive your legal rights in the future.”

Meanwhile, for those who can document that they were the victims of fraud or identity theft tied to the Equifax breach, up to $20,000 in compensation is available. That money comes from a different pot.