Cybersecurity is a growing problem in our digital and interconnected world, and incidents of hacking and downloading of personal information seem to have become commonplace.
The most recent incident, involving credit-reporting firm Equifax, stoked widespread concern and outrage in the American public, not only because of the number of people affected (nearly half of the U.S. population) but also because consumers have little choice when it comes to the collection of their personal financial information by credit reporting agencies.
The genie is out of the bottle now, so there’s not much individuals can feasibly to do get their information back. But it’s important to understand what happened to your data and what you can do now to protect yourself from thieves using this data to steal your identity.
What Happened?
On September 7, Equifax (one of the three major credit reporting agencies) reported that hackers had breached their computer security systems and accessed personal information for as many as 143 million people. The hack included sensitive information including names, addresses, Social Security numbers, and even some driver’s license numbers. Over 200,000 consumers also had their credit card information stolen.
Initial reports put the timing of the breach between mid-May and July and was not discovered until the end of July. More recent media articles date the hacking activity earlier, beginning in March.
Equifax initially responded by setting up a website (www.equifaxsecurity2017.com) to help people find out if their personal data was accessed as part of the breach. The company also offers affected individuals one year of complimentary credit monitoring and identity theft protection through TrustedID Premier (an Equifax product.)
Are you Affected?
Equifax is one of the big three credit reporting agencies, along with Experian and TransUnion. If you have a credit card or any type of bank loan (i.e., mortgage, car loan) you most likely have a credit report on file with Equifax and the other reporting agencies as well.
You can see if your credit information was accessed as part of the Equifax hack by going online to www.equifaxsecurity2017.com and clicking on the “Check Potential Impact” link. Make sure you do this over a secure, password-protected internet connection, such as the one in your home.
What are Your Options?
There are several steps affected consumers can take to help protect themselves as a result of the data breach. None of these options are mutually exclusive, so you can choose more than one:
Register for fraud alerts—A fraud alert acts like a red flag on your credit report, notifying any inquiring creditors that your credit information may be subject to identify theft. There’s no cost to consumers to set up a fraud alert, although creditors may have to take extra steps to check your identity before extending credit. This could delay how quickly any credit applications you file are processed.
Freeze your credit report—Freezing your credit report will make it harder for identity thieves to open credit cards and establish loans in your name. But it also means creditors that you want to work with (e.g., when applying for a loan or for some job applications) will not be able to access your information unless you lift the freeze, which you can do either temporarily or permanently. When you do want to permit access to your credit file, you will have to contact the reporting agency to lift the freeze. Some reporting agencies may also charge consumers to freeze their reports, although Equifax lifted any freeze charges in the aftermath of the hack. The Federal Trade Commission provides more information regarding credit freezes here.
Lock your credit file—With Equifax, you can request to lock your credit report, which is similar to a freeze, but it won’t lock your report with the other two credit reporting agencies. Equifax included a credit file lock with their complimentary TrustedID service to affected consumers. You can choose to lock or freeze your credit file, but not both. TransUnion details how to lock or freeze your credit report here. Experian credit freeze instructions here.
How to Protect Yourself
It’s always been a good idea to check your credit report on a regular basis, but the Equifax hack has made it more critical for individuals to do so more frequently and carefully.
Check your credit report for free—Visit annualcreditreport.com to see the reports all three major credit reporting agencies have on you. Look for credit card accounts or bank loans you don’t recognize.
Watch your credit card statements closely—Be sure to review all activity to your cards at least monthly to catch unauthorized charges. Place spending alerts on all your credit cards and banking accounts so that you receive an email or text alerting you to activity.
Freeze your credit report—Between freezing and locking your credit report, freezing is the easier option. But consider how it may affect your day-to-day transactions. For example, when you add a new line or device on your mobile phone plan the cellular provider will likely want to run a credit check, which will require you to unfreeze your credit report temporarily.
File your 2017 taxes early—In recent years, identity thieves have taken advantage of victims by filing illicit tax returns and claiming refunds before individuals get around to doing their taxes. You can circumvent this scam by filing your Form 1040 as soon as you can.
What’s the Next Course of Action?
Equifax is squarely in the crosshairs of lawyers and members of Congress who will want answers about the hack and will seek to hold company executives accountable. The entire credit reporting industry is also likely to come under higher scrutiny as a result of this security breach.
Consumers really can’t opt-out of the data collection these firms are doing—they gather and maintain your credit history whether you want them to or not. The only way you can really prevent them from collecting your personal information is to not borrow money or apply for a loan from a bank or credit card company.
There are questions about any legal action consumers can take against Equifax. At first, the company’s Terms of Use agreement (the legal mumbo-jumbo none of us read but all agree to so we may access a company’s services) limited any legal action to arbitration and restricted consumers’ ability to file class-action lawsuits. Equifax now states their Terms of Use have been changed to remove limits “related to the free products offered in response to the cybersecurity incident or for claims related to the cybersecurity incident itself.”
That may provide consumers with some legal recourse if their personal information is used improperly by anyone else. But prevention and vigilance are the first steps consumers should follow to help secure their vital credit against unauthorized use and guard against potential financial damage.
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