Identity theft seems like something that happens to other people, but following the Equifax breach we all need to give this some extra attention to remain fiscally strong. Protecting our credit is a decidedly unexciting but necessary step to maintaining our financial health, so grab a spoonful of sugar and let’s take our medicine.
On July 29, Equifax discovered that “criminals exploited a U.S. website application vulnerability to gain access” to consumer data. Up to 143 million names, Social Security numbers, dates of birth, addresses and some driver’s license numbers were stolen. Credit card or credit dispute information was taken for another 200,000. Equifax claims their reporting databases remained secure and consumers’ credit reports will not be affected.
Is This Different From Other Breaches?
Since 2005, over 900 million credit, identity or medical records have been exposed in the U.S. Nearly 17 million of those were just this year. Equifax itself has been cited for smaller breaches, which were attributed to their dated infrastructure and software. According to one critic, their “infrastructure is…like stepping back in time a decade.”
The personal information released through the Equifax breach is more comprehensive than other well-reported breaches of recent past (Yahoo, Anthem, Target). This makes the information highly coveted on the black market, where each identity can go for $30 apiece. Data is usually sold immediately after it’s received, and since Equifax failed to notify the public for six weeks, it raises the likelihood that information could have passed to people bent on stealing your identity. Bottom line: You should pay attention to this one. (For related reading, see: Equifax Hack: 5 Biggest Credit Card Data Breaches.)
Response From Equifax
Equifax has set up a website where you can determine if you were affected. If your credit card information was taken, you’ll received a notice in the mail. Equifax is also offering one year of monitoring from TrustedID Premier to all U.S. citizens. There has been some concern that using TrustedID means waiving your right to a class action lawsuit, but that language has been removed from the terms of coverage. Once your year of coverage is up, you’ll have the option to renew or not.
What You Get from TrustedID Premier
- You will be alerted when a company checks your credit history or when records show you opened a new account, made a late payment, filed bankruptcy, had a legal judgment against you or your credit limits or personal information change. (For related reading, see: Pros and Cons of Credit Monitoring Services.)
- You will not be alerted if someone withdraws money from your bank or uses your Social Security number to file a false tax return.
Identity Theft Insurance
- Identity theft insurance covers the cost to repair your identity. If reported within 90 days of the loss, TrustedID provides coverage for expenses, legal fees and lost wages incurred from fraud, embezzlement, theft, forgery, a data breach or a stolen identity.
- It does not reimburse money lost from identity theft.
- Policies have deductibles and limitations and may require you to use coverage from your homeowner’s policy first. See full terms for all coverage details.
Social Security Scanning
- TrustedID looks for your number on possible black-market exchanges for such information.
Other Steps for Staying Safe
- Buy identity monitoring from a company like Lifelock.
- Everything related to your identity doesn’t show up on a credit report. Identity monitoring looks at information such as your bank account, Social Security number, driver’s license number, passport and medical ID and notifies you when your address changes, you show up in court or arrest records, you order new utilities or services, cash checks, appear on social media or change your address with the USPS.
- It does not monitor tax or government benefit fraud.
- Monitor your own credit reports. At www.annualcreditreport.com you can check your credit reports at all three agencies for free once per year. Review one agency every four months to keep the closest eye on your credit throughout the year.
- Don’t forget the kids. Your children’s identities are vulnerable as well. Review credit reports for your minors over the age of 14.
- Review your statements. Keep an eye on bank and credit card account transactions.
- Freeze your credit. Put a lock on your credit at each agency so no one can ruin your credit or open new accounts in your name. The downside? You can’t open new accounts either until you lift the freeze, which can take a few days. So, if you want the 12-months-same-as-cash deal that expires tomorrow you may be out of luck. Freezing also doesn’t help to protect your existing accounts, so you may want to do this in conjunction with credit monitoring. If so, initiate the monitoring before you initiate the credit freeze.
- Consider a fraud alert if you’re not up for a credit freeze. A fraud alert can be placed on your account for 90 days (or longer if your identity was stolen). You’ll still be able to run your credit and open accounts during this time frame, but if you do, someone must verify your identity first (by calling you, for example). Fraud alerts are free, and rather than calling all the agencies, you only contact one. Once you do, they must notify the others to initiate the fraud alert as well.
- Notify the BMV. If your driver’s license has been stolen, the BMV may give you a new number or the state might flag your number in case someone else tries to use it. Criminals can use your driver’s license number to assert that you committed traffic violations or other crimes they committed. This accounted for 4% of identity fraud last year.
In our busy lives it can be challenging to find time to take these kind of precautions, but keep in mind that it can take years to recover if someone successfully steals your identity. An hour or two now could save you a lot more time and aggravation down the road.
(For more from this author, see: The Best Way to Handle Financial Mistakes.)