Like the massive $700 million Equifax settlement in July, Yahoo may soon be agreeing to its own $117.5 million dollar settlement for repeated data breaches.
Potential victims and claimants, in this case, are any people in either the U.S. or Israel, who had an account with Yahoo, at any time, from 2012-2016. And similar to the Equifax situation, the Yahoo settlement, in terms of the cash option for victims, may be a case of diminishing returns from a fixed pot of money.
In the Equifax settlement, $31 million was specifically set aside for victims to be compensated for having their private and personal information intruded upon by hackers. As a result, these victims were offered a choice by the company: A $125 payment or free credit reporting for four years. But, because there were so many claims for the financial compensation option (since the data breach in that instance impacted 147 million people), the pool of money from the existing $31 million kept getting smaller until victims started receiving far less than $125. As a result, even the Federal Trade Commission asserted that free credit reporting was the better option for victims to choose (as opposed to the cash option).
And the Yahoo settlement situation appears to be similar to Equifax’s. As a result of the Yahoo settlement, victims are also offered a choice: A $100 payment or free credit reporting for two years. But, as what happened in the Equifax situation, if too many victims of the various Yahoo data breaches choose the cash option, then those people may end up receiving far less than $100, as even Yahoo attests.
In select cases, there is the possibility that a victim can receive more than a $100 payment (up to $358). But, again, the diminishing returns issue from a set fund of available money may greatly reduce anyone’s potential ability to receive $358.
Also, Yahoo wants data breach victims to know: “You may additionally provide documentation or proof to receive reimbursement of up to $25,000.00 in out-of-pocket losses, including lost time, that you believe you suffered or are suffering because of the Data Breaches. As to documented lost time, you can receive payment for up to fifteen hours of time at an hourly rate of $25.00 per hour or unpaid time off work at your actual hourly rate, whichever is greater. If your lost time is not documented, you can receive payment for up to five hours at that same rate.”