CONSUMERS BEWARE! Equifax’s “Solution” to Data Breach Waives Your Rights to a Class Action Lawsuit

The recent news of Equifax’s data breach has brought out an important, but often overlooked, question that should be on the minds of all who are potentially affected: Are you reading the fine print? In this case, the fine print that thankfully someone did read was in the Terms of Use of TrustedID. What does this have to do with Equifax?

As a result of the recent security breach that put the personal and financial data of an estimated 143 million people at risk for identity theft, Equifax partnered with TrustedID to offer credit monitoring and ID theft liability coverage to those who were affected. Sounds reasonable, right?

The Problem

The problem is that in order for users to get the benefit of TrustedID’s program, the Terms of Use require the user to waive their right to participate in a class action relating to their use of TrustedID services. Do you see the problem here?

Perhaps even worse is that in addition to waiving this right, the individual must also agree to arbitration of their claims against TrustedID. This means that you can’t take them to court, and you would have to settle with them on their terms. Worse still, the Terms of Use also have consumers who want to use their services immunize TrustedID for damages that result from TrustedID negligently providing their services. In other words, not only can consumers not participate in a class action suit, they cannot even seek arbitration or damages in the event TrustedID negligently performs its duties and damages result.  

One doesn’t need an overactive imagination to connect the lockdown of actions against TrustedID for its services during the breach, to Equifax attempting to do something similar to avoid class action liability from millions of potential victims. Indeed, Equifax’s own Terms and Conditions already contain a waiver of class actions and an agreement to arbitration for any consumer who engages in a transaction with Equifax. The bar is low for what constitutes a transaction—even ordering a credit report is enough. By creating a relationship with them, you practically automatically waive your class action rights against them.

The sheer number of people who are potentially affected may head this battle off at the pass and force Equifax to specifically disavow waivers of class action rights as they relate to Equifax’s actions addressing the breach of data. Then again, it may not, and lawyers will spend the next few years arguing over whether TrustedID’s, and potentially Equifax’s, waiver of class action rights was enforceable.

The Fine Print

Which brings us back to the fine print. It is very possible (more likely than not), that if some eagle-eyed consumer advocate had not gotten the word out that to take advantage of the breach “fix” Equifax offered, consumers would have to give up their class action rights, then that language would have stayed in the Terms and Conditions. And that should be enough to put every consumer on the lookout for more fine print.

The moral of the story here is that it always pays to ask questions about what you are supposedly getting when you sign a contract; and to read the fine print for yourself to understand that you may be giving up something more valuable than what you are getting in return.

Your Kansas City Consumer Advocate

At Starosta Law Firm, we understand the effects of not reading and completely understanding a contract. We also hate seeing people robbed of their legitimate rights in the name of corporate greed. Let Tim help you with your consumer and business law problems today.

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The Starosta Law Firm LLC

The Starosta Law Firm is a small firm dedicated to providing every client with the customized representation they require, no matter what type of situation they are facing.

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