Nearly half of all Americans have had their most sensitive personal data stolen from Equifax, one of the country’s three credit-reporting bureaus.
The hack represents the largest single data breach in U.S. history, and we should all be very concerned about the ramifications.
Following are my immediate observations and suggestions, which are likely to evolve over time as the situation becomes clearer.
Here are just a few of the fraudulent activities for which you may be at risk:
• Fraudulent purchases made using your existing credit cards.
• Fake credit card accounts taken out in your name.
• Mortgages or loans taken out in your name.
• Your tax returns being hijacked.
With the situation unfolding, it’s still too soon to know what all the possible negative consequences may be. But one thing is certain: Equifax has clearly demonstrated that it is an unworthy steward of our personal data, especially considering that this is its third (and worst) hack in the past two years.
Adding insult to injury, Equifax is offering only one year of free credit monitoring, knowing full well that the kind of data stolen typically takes many years to surface. Given the company’s track record, I would recommend avoiding all contact with Equifax. That means not signing up for any of its services, free or otherwise.
Next steps
What should you do about the situation?
• At a minimum, carefully review every credit card statement for any fraudulent purchases. Card issuers have become pretty adept at spotting unusual purchases, and more likely than not they will contact you first if they suspect something. Nonetheless, make the effort to verify the activity yourself every month if you don’t already.
• Request copies of your latest credit reports through annualcreditreport.com and review them carefully for any errors or fraudulent activity. You can get three free reports each year, one from each of the three major credit bureaus (Equifax, Experian and TransUnion). If you request one from a different company every four months, you will maximize the value of this free monitoring capability.
• Sign up for credit fraud alert monitoring or take the stronger step of placing a credit freeze at any of the credit reporting agencies. Whether you take either of these actions depends on your personal risk tolerance. If you choose one of these approaches, you only need to sign up at one of the bureaus, because it will notify the others. I wouldn’t pick Equifax, even if it’s free. Learn more about the benefits on the bureaus’ websites. The downside, in addition to the cost, is that alert monitoring could result in your being inundated with a lot of warnings that are not especially serious. And a credit freeze does involve some degree of hassle, both in setting it up and in temporarily removing it whenever you wish to open up any new accounts.
• Make sure that your email account is highly secure, because the warnings from the various monitoring activities you may be undertaking are typically sent via email. It’s important that you actually receive such messages, not have them intercepted (or even seen) by hackers. Your email account password should include upper- and lower-case letters, numbers and special characters. If your service provider offers two-factor authentication (i.e., texting you before making changes to your password or other personal information), be sure to take advantage of that as well.
Unfortunately, none of the above steps will help you address any IRS, Medicare or Social Security fraud of which you may become a victim. Consider writing to your congressional representatives to urge them to take steps to make it easier in the future to identify and recover from identity theft involving federal agencies.
On the positive side, even if your personal information has been compromised, that doesn’t mean you will become an identity-theft victim. But you will need to remain vigilant for a long time before the dust settles after a data protection failure of this magnitude.
For more information on the credit-reporting agencies, visit equifax.com, experian.com or transunion.com.
Los Altos resident Artie Green is a Certified Financial Planner and principal at Cognizant Wealth Advisors. For more information, call 209-4062, email [email protected] or visit cognizantwealth.com.
