How Equifax's $700 million settlement could end up compensating you for ID theft

Americans will now get compensation for losses tied to one of the biggest data security failures ever.

Credit-reporting company Equifax has agreed to pick up the tab in a proposed deal with the Federal Trade Commission, Consumer Financial Protection Bureau and 50 states and territories to settle allegations that it did not implement sufficient security measures to protect its network. The settlement still must be approved by the U.S. District Court for the Northern District of Georgia.

The deal calls for Equifax to pay at least $575 million, including $300 million for free credit monitoring services, $175 million to states, the District of Columbia and Puerto Rico and $100 million in penalties to the CFPB.

The company could be forced to pay another $125 million if the initial amount is not enough to cover consumers' losses, bringing the total tab to up to $700 million.

Equifax is accused of failing to adequately patch a security flaw that enabled hackers to swipe about 147 million names and dates of birth, 145.5 million Social Security numbers and 209,000 payment card numbers and expiration dates in 2017.

The FTC also said Equifax had stored network credentials and passwords, Social Security numbers and other consumer data in plain text files, which makes them more susceptible to criminal activity.

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“This settlement requires that the company take steps to improve its data security going forward, and will ensure that consumers harmed by this breach can receive help protecting themselves from identity theft and fraud," FTC Chairman Joe Simons said in a statement.

As part of the deal, the company must also implement internal measures to ensure it has adequate security systems and protocol.