By now you’ve almost certainly heard about last week’s massive Equifax data breach. Equifax estimates that the breach impacted an astonishing 143 million US consumers. That’s nearly half the American population. That means there’s a good chance that you or somebody you know has had their information wrongfully stolen.
These days, it seems like data breaches are nothing out of the ordinary. You probably remember hearing about the Target data breach in 2013, Home Depot’s in 2014, and the massive data hack at Yahoo last year. Odds are you weren’t significantly affected by any of those security breaches. So maybe you aren’t rushing to check your credit report or put a security freeze on your credit report file after news of the Equifax breach hit the front-page. That might be a mistake.
The Equifax data breach is worse than you realize
Data breaches involving Social Security numbers are not uncommon. This situation is unique however. Unlike Target, Home Depot and Yahoo, Equifax is a credit-monitoring company that collects some of the most sensitive details of Americans’ financial lives, from consumer’s credit card account information to outstanding medical bills.
According to reports, the hackers obtained names, Social security numbers, birth dates, addresses, driver’s license numbers, credit card numbers and other documents containing personally identifiable information. That’s an information gold mine for cyber thieves.
On a scale of 1 to 10, this is definitely a 10 in terms of identity theft and fraud risk.
What thieves can do with your information?
Identity fraud is serious. It can potentially destroy your finances and even ruin your reputation.
Let’s say a cybercriminal obtains your credit card information and maxes out a card in your name. Good luck passing a standard credit check. That means you can say goodbye to qualifying for a mortgage, an auto loan, or even refinancing those student loans to lower your interest rate. You might even run into trouble with your internet, cable, or cell phone service providers!
Getting your life back in order after identity theft can take months or even years. And unfortunately, you’re the one whose responsible for putting the pieces back together.
What should you do?
If you google “Equifax data breach what to do” most articles will steer you back to a website – equifaxsecurity2017.com.
After the hackers invaded the Equifax database, Equifax set up a website so consumers can see if their information had been compromised. To check, users just need to enter their last name and the last six digits of the Social Security number.
I plugged in my information. Here’s the message I received. Uh oh.
Is it a good idea to sign up for Equifax’s free credit monitoring services?
Whether your personal information was potentially impacted or not, the site also offers to enroll consumers in Equifax’s “TrustedID Premier” credit monitoring service for free for one year. While Equifax is waiving the $19.95 a month fee that it normally charges consumers for those services as recompense to victims, the gesture isn’t as selfless at it might seem.
Consumers are generally required to provide a credit card number to enroll in these services. Equifax will also use that information to initiate recurring payments if you haven’t canceled the services before the end of the trial period. In fact, this practice was one of the reasons Equifax was hit with a $2.5 million fine earlier this year.
So, let me tell you one thing: I will not be signing up for Equifax’s free credit monitoring services.
First of all, the fact that Equifax is offering to sign consumers up for its identity protection services is laughable. Why anyone would trust Equifax to monitor their credit or protect their information at this time is beyond me.
Second, it looks like Equifax still hasn’t gotten their s*** together. Not only did Equifax wait six weeks to disclose the breach (with no explanation for the delay), but there are reports that their site is malfunctioning. Apparently, the site has been flagged as a phishing threat. In some cases, users have been told that they weren’t affected but received a different answer when the checked the site with the same information from a mobile device. Simply put, you can’t rely on their information.
How to Protect Your Identity
Whether Equifax thinks my personal information is at risk or not, I’m not taking any chances. There are a few steps you can take to protect yourself against damages that could arise from this breach. Most experts recommend signing up for account monitoring services and placing a security freeze on your credit lines. Here’s are some of your options.
1. Check Your Credit Reports
You are entitled to a free credit report every 12 months from each of the three major credit bureaus (Equifax, TransUnion and Experian). You can request a free copy by going to AnnualCreditReport.com. I recommend requesting a report once every four months so you can monitor your credit throughout the year.
Once you have your credit report, look for signs of fraud or identity theft such as:
- Accounts that you didn’t open
- Inaccurate personal information appearing in your reports
- Incorrect dollar amounts and balances
- Credit inquiries from companies you never contacted
2. Credit Monitoring
Credit monitoring services typically involve a company watching your credit reports and notifying you of any changes to the accounts listed on your credit report or unusual activity that might indicate identity theft. Like I mentioned above, there’s a free offer on the table from Equifax. But they aren’t the only company that offers credit monitoring services. I already have Experian credit monitoring so I’ll keep an eye on that. But even if I didn’t, I’d still be saying “thanks, but no thanks” to Equifax on this one.
3. Freeze Your Credit
Placing a credit freeze on your credit lines is probably more effective than credit monitoring. A freeze prevents anyone, including yourself, from opening a new line of credit or loan account in your name. If you wish to open a new account, you’ll have to lift the freeze. You can also reinstate the freeze after you’ve opened your new account. This will be a major inconvenience, but it’s probably well worth it to protect your credit.
To place a freeze, you’ll need to contact each credit reporting company. Fees usually range from $5 to $10. Here’s some useful information from the FTC in case you need help. (Also keep in mind, placing a credit freeze will not prevent a cybercriminal from racking up charges on your existing accounts.
4. Place a Fraud Alert on Your Files
A fraud alert warns creditors that you might be a victim of identity theft. Creditors are required to verify your identity before opening a new account or credit in your name. This also includes issuing an additional card or increasing your credit limit on an existing account. While a fraud alert doesn’t prevent a creditor from opening an account in your name like a credit freeze does, at least it requires creditors to take additional steps to verify your identity first.
And unlike a credit freeze, you only need to place a fraud alert with one of the nationwide credit reporting agencies. Once you’ve placed the alert with one, they are required to notify the other agencies.
A Few Final Thoughts
I don’t have any major purchases coming up that will require a credit inquiry, so I’m going with Option #3 – the credit freeze. I prefer a stronger shield against fraud and identity theft than a fraud alert can offer. Considering the tremendous amount of personal data that the thieves were able to access, there’s a chance that they have enough of my personal information to overcome a fraud alert.
It may be inconvenient, but I’ll deal with a few fees and the hassle of having to place, temporarily lift, and eventually permanently remove the security freeze as necessary.
Have you taken any steps to check your credit? If not, what are you waiting for? Equifax already gave those hackers a six-week head start. Get on it!