The Federal Trade Commission is encouraging people affected by the Equifax data breach to choose free credit monitoring over the $125 cash alternative. Why? Because you might end up getting "far less than $125."
As part of the settlement, people impacted by the breach had the option to sign up for 10 years of free credit monitoring, or alternatively they could file a claim for $125 if they already had credit monitoring. The amount of money set aside for the cash payment option is "capped at $31 million," according to the FTC, so consumers who go with that option might not get the $125 they expect.
"A large number of claims for cash instead of credit monitoring means only one thing: Each person who takes the money option will wind up only getting a small amount of money," the FTC said in a blog post Wednesday. "Nowhere near the $125 they could have gotten if there hadn't been such an enormous number of claims filed."
The FTC is encouraging people who haven't submitted a claim yet to opt for free credit monitoring. It also said people who've already submitted claims for the cash payment will be given the chance to switch.
It's unclear how many claims have been submitted so far to the settlement administrator, JDN, but an FTC spokeswoman said more than 4.5 million consumers have visited the agency's site about the settlement.
The FTC stressed in its blog post that there's still money available for other parts of the settlement. People can file a claim to be compensated for the costs of recovering from the security breach -- including any costs associated with the theft of your identity and freezing and unfreezing your account -- and compensation of unauthorized charges to your banking accounts. The agreement caps payouts at $20,000 per person.
Watch this: Equifax breach: Find out if you can claim part of the $700 million
Originally published July 31. Update, Aug. 1: Adds more information about the settlement.