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Should You Participate in a Class Action Against Equifax?

Anthony Giorgianni

Consumer Reports has no financial relationship with advertisers on this site.

If your personal information is among the 143 million credit files compromised in the Equifax cyberattack, you might be wondering if you have any recourse against the company.

As it turns out, you probably do. Since the Equifax breach—which involved the theft of names, birth dates, addresses, credit card numbers, and full Social Security numbers—more than 50 class-action suits have reportedly been filed against the credit bureau.

The lawsuits are coming about, coincidentally, just as a Consumer Financial Protection Bureau rule restoring consumers’ right to sue financial companies may be in danger of being eliminated by Congress.  

Equifax, under pressure from consumer groups, said last week that it would not prevent consumers from filing class-action lawsuits in connection with the data breach. The company said that its typical binding arbitration clause in its contracts with customers would not be applied to those affected by the data breach or to those who sign up for free credit monitoring because of the breach.

All this may have you wondering whether you should join a class-action suit.

Joining a Class Action Has Risks

Class-action lawsuits are usually initiated by lawyers on behalf of consumers who they say have been similarly harmed by a company because of fraud or other unlawful conduct.

But joining a class action can come with some risks. If you’ve suffered serious financial, physical, or other harm and you participate in a class-action lawsuit, you give up your right to sue a company on your own.

A proposed class-action lawsuit filed against Equifax in the U.S. District Court in Oregon on Sept. 7 accuses the company of negligence by failing to take appropriate measures to protect consumer data. The suit estimates billions of dollars in losses.

Still, the complaint acknowledges that the loss to any individual is likely to be small. The lawsuit says that the loss of one of the two lead plaintiffs named in the complaint amounts to just $19.95—the amount he paid for a third-party credit monitoring service after the breach was announced, according to the complaint.

Class-Action Basics

Lawyers turn to class actions because the cost of suing companies on behalf of just one consumer often is impractical, especially if the financial loss to that individual is small.

“Class actions can sometimes be the only effective way for wronged consumers to hold the wrongdoer accountable,” says George Slover, a senior staff attorney for Consumers Union, the policy and mobilization arm of Consumer Reports.

One of the biggest benefits of a class action is that it discourages companies from engaging in fraud or other illegal activities, says Myriam Gilles, vice dean at the Cardozo School of Law in New York City.

“If a bank or credit card company can steal $50 each from millions of people without any concern, they’re going to do it over and over again,” she says.

What to Consider

If you’re thinking about joining one of the suits in connection with the Equifax breach, there isn’t much you can do right now. A class-action lawsuit can’t proceed without approval of the courts, and these many class actions could be consolidated into one or just a few larger cases. 

But here’s what you should keep in mind as details of these suits emerge:

There are many ways to find out about class actions. 
Sometimes you’ll hear about a class action when the lawsuit is initiated or when there’s a proposed settlement. If there’s a list of alleged victims, as there probably is in the Equifax case, you may receive a letter, Gilles says. Or you might see a legal notice on TV or in print. You can also search for class actions on websites such as ClassAction.com and Top Class Actions.

You don’t need to do anything to be covered. Class-action lawsuits automatically cover everyone the court determines to be part of the class. So if you do nothing, but your data was breached, you’ll automatically be included and entitled to any benefits once the case is resolved. Because the legal fees come out of the settlement, you won’t be asked to pony up any money.

You’ll have to decide whether it’s worth filing a claim. In some cases, you may have a choice of accepting either a default payment or applying for a higher amount based on any proof you have that your losses were higher, says Jeff Sovern, professor at the St. John’s University School of Law in New York. You’ll also have another opportunity to opt out or file an objection with the court if you think the settlement is too little, Gilles says.

You can opt out of a class action. If you do, you’ll preserve your right to sue on your own, Sovern says. If you suffered serious harm, you should consult an attorney to discuss your options, Slover advises.

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