Some consumers who tried to deposit an Equifax settlement check in recent days got a surprise: It bounced.
The checks, a result of a legal settlement over the credit-reporting firm’s 2017 data breach, were written against an account at Signature Bank. The bank was taken over by regulators on Sunday after account holders — spooked by the failure of Silicon Valley Bank last week — began withdrawing their money en masse.
However, the checks that were returned unpaid are not related to the bank’s failure, said Jennifer Keough, CEO of JND Legal Administration, which is handling the Equifax settlement.
“What happened here, due to a Signature Bank clerical error, certain checks that should have cleared were rejected by other banks,” Keough said.
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Fewer than 5,000 consumers are affected, Keough said. Roughly 18 million consumers were part of the class-action lawsuit that led to the settlement, she said.
Consumers are receiving payments after a data breach
In the wake of Equifax’s 2017 data breach, which compromised the personal information of more than 147 million consumers — including names, birth dates and Social Security numbers — the company became the target of multiple lawsuits and reached a settlement in 2019 with the Federal Trade Commission, the Consumer Financial Protection Bureau and all U.S. states and territories.
As a result, consumers who were affected by the breach had the option of signing up for either up to $125 or free credit monitoring at all three of the largest credit reporting firms: Equifax, Experian and TransUnion.
After implementation was delayed due to legal challenges, the settlement received final court approval in early 2022.
The cash payments — which may be far less than $125, such as $5 or $21 — began going out in mid-December either as a check, payment to a PayPal account or prepaid card via email from the settlement administrator, depending on how the consumer chose to receive it.
Here’s what to do if your settlement check bounced
If you are among those whose check bounced, you will be contacted by the administrator, Keough said.
“We’ll be notifying those individuals and reissuing their check,” she said.
Additionally, if your bank charged you a fee for the incident, you should reach out to the administrator. You can do that via email ([email protected]) or phone (1-833-759-2982).
“When they provide us with proof of [the charge], the money will be sent to them,” Keough said.