Learn How the Equifax Settlement Card Works

What the Equifax Data Breach Was and Why a Settlement Happened

In 2017, Equifax, one of the three major credit reporting companies in the United States, experienced a massive data breach. Hackers accessed personal information belonging to approximately 147 million people. This information included names, Social Security numbers, birth dates, addresses, and in some cases, driver's license numbers and credit card information.

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Equifax is a credit bureau—a company that collects information about how people pay their bills and manage debt. Banks, credit card companies, landlords, and employers use credit reports to make decisions about lending money or hiring. Because Equifax handles such sensitive information, the company has legal responsibilities to protect it and to tell people when their data has been compromised.

The company did not discover the breach for several months after it occurred. When Equifax finally announced the breach in September 2017, it faced criticism for the delay and for not protecting customer data well enough. People whose information was exposed faced potential identity theft and fraud risks.

In response, the Federal Trade Commission (FTC), state attorneys general, and the Consumer Financial Protection Bureau (CFPB) investigated Equifax. In July 2019, these agencies reached a settlement with Equifax. The company agreed to pay up to $700 million to resolve the case. This settlement required Equifax to provide certain services to affected people and to improve its data security practices.

Takeaway: Understanding the context of the settlement helps explain why the card exists and what services it offers. The settlement was created specifically because of the 2017 breach and the regulatory action that followed.

Who Can Receive the Settlement Card and How Distribution Works

The Equifax settlement card was made available to people whose personal information was exposed in the 2017 data breach. Not everyone affected by the breach automatically received a card. Instead, people had to submit a claim to receive compensation or services under the settlement.

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The settlement offered three main options to affected people. First, those who purchased credit monitoring or identity theft protection services could receive cash payments to reimburse what they spent. Second, people could receive free credit monitoring services for a set number of years. Third, people who already had credit monitoring services could receive cash payments without having to prove they spent money.

The settlement card itself was one way to distribute cash payments to claimants. Rather than sending checks, Equifax loaded money onto prepaid debit cards for people who chose this payment method. This approach allowed faster distribution of funds and reduced the need for people to cash checks or provide bank account information.

Distribution of the settlement cards began in 2020 and continued over several years. The FTC and CFPB created a claims process where people could submit information about their losses or request services. A third-party claims administrator managed the process of verifying claims and issuing cards or payments.

As of recent years, the claims period for the settlement has closed, meaning new claims are no longer being accepted. However, people who already received settlement cards can still use them to access their funds. The exact end date for using the cards varies depending on the card issuer's policies.

Takeaway: Settlement card distribution required individual claims to be submitted. People did not automatically receive cards; they had to go through a formal process to show they were affected by the breach and deserved compensation.

How to Use the Equifax Settlement Card Once You Have It

The Equifax settlement card functions as a prepaid debit card loaded with money from the settlement. If you received a card, you can use it much like a standard debit card to make purchases, withdraw cash from ATMs, or transfer money to a bank account.

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Most settlement cards were issued by a specific bank or payment processor chosen by the claims administrator. The card comes with a unique account number, expiration date, and security code, similar to a regular debit card. Instructions are typically included with the physical card or provided through the card issuer's website.

Common ways to use the card include: making purchases at retail stores or online retailers that accept debit cards; withdrawing cash from ATMs (though some ATMs may charge a fee); paying bills online using the card number; and transferring funds to your personal bank account through electronic transfer features.

The settlement card has specific rules about its use. First, the card usually remains valid for a limited period, often 3 to 5 years from issuance. After the expiration date passes, you cannot use the card to make new transactions. Second, there is a total dollar amount loaded on each card based on the person's claim, and once that money is spent, the card has no remaining balance. Third, certain types of transactions may not be allowed—for example, you typically cannot use the card to withdraw cash from a credit card cash advance at a bank.

The card issuer provides online account access for most settlement cards. You can log into your account through a website or mobile app to check your balance, view transaction history, and sometimes set up alerts for account activity. This helps you track how much money you have left and what you have spent.

Takeaway: The settlement card is a prepaid debit card with a limited balance and expiration date. Using it requires understanding the card's features, fees, and timeframe for spending the settlement money.

Fees, Limitations, and Important Terms to Know

While the settlement card provides a way to access your compensation money, it may come with certain fees and limitations. Understanding these details helps you make informed decisions about how to use the card.

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Common fees associated with settlement cards include ATM withdrawal fees, balance inquiry fees, and inactivity fees if the card is not used for a long period. Some cards charge per transaction, while others may have monthly maintenance fees. The specific fees depend on the card issuer and the terms of the particular settlement card program. Card documentation provided when you receive the card lists all applicable fees.

The settlement card typically has a maximum balance that cannot be exceeded. This amount represents your settlement compensation. You cannot add additional funds to the card, and once the balance is depleted, you cannot use the card for new transactions. Unlike a credit card, the settlement card does not provide access to borrowed funds.

Transaction limits may apply, meaning you can only spend or withdraw a certain amount per day or per transaction. These limits exist for fraud prevention purposes. For example, a card might allow $500 in ATM withdrawals per day but no more.

The settlement card typically does not build credit or appear on your credit report. Using the card will not improve your credit score because credit bureaus do not track prepaid card activity the same way they track credit card or loan payments.

The card usually expires on a specific date printed on the physical card. Before expiration, any remaining balance may be transferred to your bank account if you provide account information. After expiration, accessing the remaining funds may require contacting the card issuer or claims administrator.

Takeaway: Settlement cards have specific fees, limits, and expiration dates. Reviewing your card documents and understanding these terms helps you avoid unexpected charges and plan how to use your settlement money.

What to Do If Your Settlement Card Is Lost, Damaged, or Has Problems

Settlement cards, like any physical debit card, can be lost, stolen, or damaged. If this happens, you need to take action quickly to protect your remaining balance and obtain a replacement card.

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If your card is lost or stolen, contact the card issuer or claims administrator immediately. Most card issuers provide a customer service phone number on the back of the physical card or in documentation that came with it. Call this number to report the card as lost or stolen. The card issuer can freeze the account to prevent unauthorized use and issue a replacement card.

If your card is damaged and cannot be used (for example, if the magnetic stripe is worn or the card is physically broken), you can also contact the card issuer to request a replacement. Explain the damage and the issuer will typically send a new card with the same balance and account information.

If you notice unauthorized transactions on your settlement card—meaning purchases or withdrawals you did not make—report these to the card issuer right away. Provide specific details about the transactions, including the date, amount, and merchant name. The issuer will investigate and may reverse fraudulent charges.

If the card issuer's customer service line is unavailable or unhelpful, you may be able to contact the claims