Despite our best efforts, our private information is housed with hundreds if not thousands of private companies and government agencies. We’re also personally barraged with direct attempts at our private data through phishing emails, IRS scam phone calls, and hacking public Wi-FI. These days thieves are more likely to want your Wi-Fi password than your wallet. According to a recent study, $16 billion was stolen from 15.4 million U.S. consumers in 2016. In the past six years, identity thieves have stolen over $107 billion.
This week, a massive security breach was announced at Equifax, one of the three major credit bureaus. The impact was estimated at about 143 Million people or basically half of the country in one of the largest cyber security breaches ever. Whether or not you have chosen to do business with this firm, they likely have a great deal of your personal information including your address, birth date, social security number, driver’s license info, credit card numbers, and financial records.
Equifax has set up a program to help people protect themselves and their data from potential identity theft, but it’s not without its challenges:
- The online tool Equifax set up to notify people whether or not they have been impacted has been beset with errors. Many people have received conflicting information about whether they were impacted after putting in the same information multiple times. It’s best to assume you have been impacted whether the tool says so or not. The tool requires 6 digits of your social security and your last name to find this information out, which is highly irregular and doesn’t inspire confidence from the firm that just got hacked.
- Equifax offers a complimentary credit monitoring protection program but gives you a date (which can be a week away) for when you can enroll. Your private information has been stolen since May, but give us one more week before we can help you.
- The identity protection program is by TrustedID, Equifax’s own program which offers credit monitoring for a year.
This is kind of like a restaurant that had an E. Coli outbreak offering you a free meal coupon afterward.
To enroll in TrustedID, it requires additional personal information and your credit card, which may auto charge you once the trial ends next year. Surprise! It feels like a bit of self-dealing and an attempt to profit from their own crisis.
- In the terms of conditions of the TrustedID program, there is a forced arbitration clause which potentially limits your rights to be part of any class action lawsuit going forward. After intense backlash, Equifax recently commented that clause won’t apply to this breach, but yet they did not waive the clause.
- Top executives at Equifax sold hundreds of thousands of dollars of stock after the breach was known internally but before making it public. This could be a complete coincidence but again looks like self-dealing.
Those are some serious challenges which don’t inspire a great deal of confidence. So let’s talk about what you can do to protect yourself now and in the future.
1. Check Your Credit Report
Regardless of whether you decide not to enroll in the TrustedID program, you should check your credit reports. You can access your credit reports for free at annualcreditreport.com. You can get one free report from each of the three main bureaus (Equifax, TransUnion, Experian) annually, so most people spread them out quarterly. You want to look for any accounts you don’t recognize. If you see accounts you don’t recognize, contact the company and speak to their fraud department immediately. The Federal Trade Commission also has additional information and resources.
2. Set Fraud Alerts or Freeze Your Credit
Freezing your credit will stop anyone (including yourself) from opening any credit accounts in your name until the account freeze is lifted. In order to lift the freeze, you will have to call the bureaus and provide the PIN that was given at the time the credit freeze was issued. This is the strongest protection measure, but not recommended if you are planning to open new credit in the near future (purchase a car, home, etc). There is a charge to enact the freeze (typically $5-$10 per person for each bureau) and a charge to temporarily or permanently lift the freeze (varies by state).
A fraud alert, on the other hand, is free and basically like two-factor authentication for your credit. The credit issuing company will have to verify your identity before opening an account. Fraud alerts last for 90 days but can be renewed. You can set fraud alerts by calling or going online at the three major bureaus.
3. Consider purchasing ID Theft Insurance
Identity theft is broader than someone accessing your credit card number and purchasing stuff. It can also mean using your social security number to access loans, medical services, government benefits, and tax refunds. With most crimes, if you are a victim, you call the police and outsource capturing and punishing the criminal. When your identity is stolen, you are both the victim and a potential perpetrator, so you’re guilty until proven innocent. You have to prove you are who you say you are and that you are the victim. That’s a different ball game altogether.
ID Theft Insurance doesn’t pay for the money stolen from you or in your name, but it reimburses you for the expenses involved in recovering your identity, such as legal fees. More importantly, if there is an identity theft incident, having a contact to help you resolve the issue quickly and efficiently is key. I’ve personally purchased ID Theft Insurance for the past 10 years from Zander Insurance at the recommendation of Dave Ramsey, and with each new data breach I see, I’m grateful for it. They’ve offered a fantastic inexpensive service which not only monitors your credit, but can also monitor your social security number, change of address, and other personal information (i.e. driver’s license, medical insurance, credit/debit card) should you choose.
4. Check Your Accounts Consistently
You cannot completely prevent ID theft, but you can limit the damage by checking your financial accounts consistently. Free services like Mint.com can aggregate your financial accounts and you can check daily for new transactions. You can also set alerts to receive notifications for purchases over a certain amount. Also, services like Credit Karma or Credit Sesame will allow you to check your credit more frequently. Keep in mind these free services only access one or two credit bureaus.
5. File Your Taxes Early
Imagine going to file your taxes and expecting a refund to receive a message that your taxes have already been filed. The IRS has a huge issue with tax fraud through identity theft. Identity thieves are using stolen social security numbers to steal millions of dollars of tax refunds from unsuspecting individuals. Filing early is a way to defend against that possibility. The IRS has additional information on safeguards for ID theft