Few if any of the 147 million Americans screwed by Equifax in its 2017 data breach will actually see the $125 checks that were touted in a settlement announced on July 22, the Federal Trade Commission (FTC) warned Wednesday.

The announcement set off wide ripples of media coverage. Many of those stories frame the matter in terms that are extraordinarily friendly to both the corporate behemoth that allowed the data breach to occur and the government regulator that’s ostensibly tasked with safeguarding consumer interests in the wake of this malfeasance.

“FTC Says ‘Overwhelming’ Number of Equifax Claims Means Consumers Likely Won’t Get $125,” the Wall Street Journal’s headline screamed.

Lest the subtleties go unnoticed, the framing of the story is clear: It’s your fault you’re not getting the money. Or it’s your neighbor’s fault; perhaps their cousin’s. All of y’all customers asking for the pittance you rightly deserve are just ruining it for each other.


NBC News went with “Equifax might run out of settlement cash, FTC warns” in the headline, with an admonishment about “consumers rushing to get a $125 check” just below. The checks won’t fly, the New York Post warned, “due to ‘overwhelming’ response.”

Noble and decent Equifax has turned out its pockets, and you ruthless scavengers have picked the very lint from the seams. Your fault, your fault, your fault. Have you no decency?

But these portrayals of the breakdown in the settlement payments system are a clever ruse. They indicate that the government’s lawyers sat down with the Equifax’s lawyers, collaborated on what was designed to be a perfectly good deal, and then a horde of greedy plebes bum-rushed the show and ruined it all.

But in fact this is all going according to design. It looks for all the world as if the FTC has stepped in to sternly enforce your rights, while sparing the feds the much grander and more disruptive task of attacking the quasi-monopoly power of the faceless and massively wealthy firms that govern the entire consumer credit market.

The tell is so simple that the finance and business and government reporters running with the breathless mob-rule framings above should perhaps find a new line of work. It’s right there in the settlement announcement. All you need is a calculator.


Item: One hundred forty-seven million individual Americans had their confidential data lifted off of Equifax’s servers courtesy of the company’s decision not to spend real money on tech security.

Item: The FTC determined that justice would be better served by a speedy settlement deal than by pursuing Equifax in court through years-long litigation from which a superior punishment could not be guaranteed.

Item: The settlement the FTC struck required Equifax to “pay $300 million to a fund that will provide affected consumers with credit monitoring services” or cover payments of $125 per person for consumers who’d rather not be compensated in the form of continuing and deepening a business relationship with the company that had just failed to lock its doors at night and put half the country at risk of identity theft.

Item: Just $31 million – or 10% of that $300 million from the press release language – was actually set aside for paying out checks, however. You’re only allowed to ask for a check if you already have credit monitoring — which is already available for free in one form or another from scads of different consumer finance apps, banking companies, and credit card providers.

Item: One hundred forty-seven million people times $125 is roughly $18.4 billion.

Item: $18.4 billion is a much larger sum of money than $300 million, and a much much larger sum than $31 million.

There are only so many ways in which one could talk oneself into the idea that a settlement that pushes $300 million out to consumers – whether in cash or trade – could be a superior outcome to litigation over Equifax’s chargeable offenses.


One way is to tell yourself that you’d actually lose in court, and win nothing for anybody. Fair enough – especially so in this case, where actual privacy laws are so far behind the arc of technology that the FTC said it wasn’t sure it even had the authority to go after Equifax for all of this. (Being constrained by the law is one thing. Portraying yourselves as robust punishers of corporate wrongdoing in part through a cash lure that you know full well you have rendered undeliverable in the same punishment system is very much another.)

All of the other ways to talk yourself into this deal require you to believe that the bad stuff Equifax did only actually works out to roughly $2 of actual harm per person harmed. So long as every person who they harmed gets $2.04 worth of something, they’ll be made whole from the damage the very rich company’s executives did by skimping on security investments for years.

In this way of thinking, something that only costs Equifax a couple bucks per head – passive credit monitoring for a decade with no fee, say – fits the bill of a “good outcome.” But you know that it’s going to look awful damn weird for your big settlement crackdown to basically hinge on forcing everyone Equifax hurt to maintain — or expand — their connection to the company that hurt them, in the form of relying on them to police your credit score for a while.

So you put in an alternative: If you don’t like the idea of lying down in Equifax’s bed again after what happened to you last time you were there, don’t worry. You can make ‘em give you $125 as a one-time thing instead.

And here’s where the built-to-spill aspect of FTC’s dealmaking genius kicks in. The settlement that gives Equifax a global release on further liability to the government – and to any individual who signs up for compensation through the deal – cannot possibly afford to give everyone $125. The choice you’ve given consumers you’re supposed to serve isn’t a real choice. The deal is actually meant to give them a couple bucks, not two weeks’ worth of grocery money.

So, despite what the headlines say, it isn’t your fault that the Equifax deal is turning out to be bogus. This is how they drew it up in the first place.

The agency gave the game away in a blog post Wednesday afternoon. It is actively discouraging the victimized from seeking monetary compensation and steering them instead to consume Equifax’s version of free credit monitoring. It warns of pitifully tiny checks going out if people don’t take the agency’s advice, pleading poverty about the deal the FTC itself struck, agreed to, and boasted about roundly.

Those same people, incidentally, have been pulling these same hijinx for years. Across numerous sectors of the economy, government regulatory bodies have been swallowed into the same business-school philosophies that drive firms like Equifax to decide your security is worth less than their bottom line. Sometimes those industries screw up so badly that it stops being possible to pretend that screwing over working people is a mistake, rather than a core competency in their business models. And so sometimes – regrettably, most regrettably, dear boy – the regulators have to be seen to punish their industry friends.

And so they’re going to strike a deal in lieu of a courtroom encounter that hinges on uncertainties. Those deals will feature some big numbers — $17 billion from Bank of America! $5 billion from Goldman Sachs! $13 billion from JPMorgan Chase! Later, you may come to find out that the enumerated amount of the settlement amounted to a rounding error on quarterly profits, thus ensuring that accountability never costs too much of anyone’s bottom line.

The money wasn’t really money or there wasn’t really enough of it, and the corporate titan that screwed you and your neighbor and your cousin over was severely punished by being granted the opportunity to force you to continue doing business with them.

And as it does that business, hey, once in a while it’s going to have a good idea for you, now that it knows all this stuff about you, and maybe wouldn’t you like to sample these other wares they offer? As long as you’re here? And then sometimes, they’ll just sign you up for such products without asking. And the cycle begins anew.