Warren calls for internal probe over FTC’s handling of Equifax settlement

Sen. Elizabeth Warren (D-Mass.) is asking the Federal Trade Commission’s (FTC) internal watchdog for an investigation after the agency warned consumers that it would not be able to accommodate everyone seeking a cash payout from a fund for victims of the massive data breach at Equifax in 2017.

“The FTC has the authority to investigate and protect the public from unfair or deceptive acts or practices, including deceptive advertising,” the senator wrote in a letter to the FTC’s inspector general on Wednesday. “Unfortunately, it appears as though the agency itself may have misled the American public about the terms of the Equifax settlement and their ability to obtain the full reimbursement to which they are entitled.”

When the FTC announced the settlement last month, it told consumers that they could opt to claim free credit monitoring or up to $125 in cash from the fund. 

{mosads}After being inundated with claims from consumers requesting cash, the FTC urged them to opt instead for the credit monitoring, saying that only $31 million had been set aside for consumer claims and that the payouts would have to be less than $125 in order to accommodate the flood of requests.

Warren said in her letter Wednesday that “the agency appeared to misinform consumers by failing to tell them about these potential reductions until after they had signed up for the payments.”

“These pages did not inform consumers that the cash payment was subject to — and in fact, was very likely to be — severely reduced,” she wrote. “As of today, the infographic on the FTC website now does not even mention the possibility of consumers receiving the $125 payment. This is because the $31 million set aside for compensation would pay exactly 248,000 individuals the maximum of $125 in alternative reimbursement compensation payment — less than 1% of the 145 million individuals affected by the breach.”

The FTC declined to comment.

— This report was updated at 12:36 p.m.