This One's Different
Data breaches are becoming so common that Americans tend to ignore them. Yahoo alone has suffered data breaches exposing at least 1 billion accounts over the past few years – a staggering number given the Earth's total population of around 7.5 billion people.
This time, the giant credit bureau Equifax is the target. Equifax recently announced a data breach that could affect up to 143 million Americans. The breach, from mid-May through July of this year, included access to personal information (names, Social Security numbers, addresses, birth dates, and driver's license numbers). Approximately 209,000 consumers suffered the theft of credit card numbers and 182,000 people lost more in-depth personal information through stolen credit dispute documents.
Here's Why You Should Care
The latest available data (from 2014) showed 167 million Americans with credit cards, so 143 million covers most of them. Consider that Equifax is a credit bureau, one of the three major collectors of data used to determine your credit score. They don't simply hold personal information related to one of your accounts – they hold information on ALL of your reported credit accounts. With more information and details on you and your accounts, identity thieves are more likely to be successful in opening accounts in your name.
In addition, most credit breaches are attacks on customer databases. The Equifax breach has more in common with IRS data breaches. Both are attacks on centralized data and information storage systems involving the majority of Americans, with great levels of detail. The potential pool of people affected by any such breach can be enormous.
Equifax says that there is no evidence of breaches of databases for consumer or business credit reporting. Still, any breach at a credit bureau raises deep concerns. Rest assured that regardless of the measures that Equifax takes, hackers will redouble their efforts to access the treasure troves of credit bureau information. The hack provides quite a bonanza for denizens of the "dark web."
Equifax Offers Help
Equifax has set up a website to allow you to check your status. By entering your last name and the last six digits of your Social Security number, you can find out whether your information is at risk. However, do you want to give this information online to a business that admits its data was hacked? If your credit card number or dispute information was stolen, you will receive a notice by mail.
Equifax is also offering a year of free credit monitoring whether or not you were affected. At the website, incongruously named https://www.equifaxsecurity2017.com, you will be given a date when you can sign up for the Trusted ID Premier program – but critics have noted the irony in signing up for protection services with the company that was breached in the first place. It's a bit like getting food poisoning from a restaurant and receiving a voucher for a free dinner at the same restaurant. If you return, you have reason to question whether you'll get the same unpleasant result.
Several outlets have pointed out that the terms of service for the Trusted ID Premier service state that you give up your right to join class actions suits for disputes and must seek relief through arbitration. It's a legally gray area whether this affects a pre-existing breach, and an Equifax statement says the arbitration clause does not apply – but this is another factor you must consider.
If you don't want the fox to guard the chicken coop, a free membership to MoneyTips includes a credit monitoring service at no charge. Premium MoneyTips members enjoy more protection, including advanced identity theft and fraud alerts as well as $1 million identity theft insurance, for less than $5 per month.
The Equifax data breach highlights the importance of reviewing your bank and credit card statements and checking your credit report periodically to look for any evidence of fraudulent charges or accounts. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. However, blunting the risk from the Equifax breach may require more than just catching fraud early. You need to take steps to prevent fraud from occurring in the first place by enrolling in an identity theft protection product. These services add another solid layer of protection against fraud.
You can place a fraud alert on your credit files, which alerts potential creditors that you may be a victim of identity theft and that they should verify your identity before opening any account. Unfortunately, identity thieves may have enough of your information to fool creditors.
The more stringent credit freeze gives you better protection, but at the price of convenience. When your credit is frozen, creditors can't get access to your credit file and will refuse to open accounts. Unfortunately, this means you also can't open any credit accounts or take out loans. You must unfreeze your own credit when you need to open an account. It's an inconvenient process, but one that delivers results.
Both credit freezes and fraud alerts target fraudulent new accounts. If your existing accounts are already compromised, you'll likely have to cancel those accounts and reopen new ones.
Make it as difficult as possible for criminals to use your information to make fraudulent charges or take out new credit accounts and loans, and they are more likely to move on to easier targets – and, given the size of recent data breaches, thieves should have plenty of available choices.
Protect yourself from identity theft; join MoneyTips today to see your credit report for free and enjoy our credit monitoring service at no charge.