Educating Homeowners

//Protecting your Identity: Why it is different this time

Protecting your Identity: Why it is different this time

Much has been written about the Equifax breach, yet many are still confused and hesitant to take steps due to misunderstanding or misinformation. As evidence, an alarmingly small percentage of consumers have frozen their credit since the breach. On the plus side, Equifax just announced that they will offer credit freezes free for life, a welcome gesture but still not enough.  All 3 bureaus should offer blanket protection for free to all consumers and more.

If you misplace or lose your credit card, the card issuer simply cancels the old account number and issues you a new card. The difference here is that we only have one social security number and driver license number, so these cannot be replaced. The egregious breach can and will follow those affected for life, unless our legislators focus on their constituents and think things through properly. Some suggestions have called for eliminating the use of social security numbers altogether, except for their original intended use- social security benefits. Certainly a Herculean task and costly to the credit bureaus, but an intriguing idea.

Congress needs to remedy this immediately, but with a well thought out plan, not one rushed to a vote for political publicity.  First, no credit bureau should be allowed to profit from consumers trying to protect their identity. Credit Freezes, Monitoring, protection and the rest should not only be free but for life.  The simple truth is that we can choose which wireless carrier, cable provider, or car insurance we want based on service, price, value etc. We lose those choices with the credit bureaus. Sadly, this breach is tantamount to the security guard napping while the vault was robbed and now charging you to prevent it from happening again.

Moreover, protections need to be proactive rather than reactive. For instance, tax fraud is a rapidly growing problem and this breach will only exacerbate things. The IRS should implement a 2 Step verification for filing taxes and receiving refunds. It defies logic that a free email account requires these steps but tax refunds and credit bureaus do not. In the interim, contact your CPA or tax advisor immediately and decide on an action plan. Change all of your passwords, including financial accounts. Consider a password manager to help set up random passwords and remember them for you. With 143 million consumers affected, the $239 million that The IRS paid in suspected refunds last year is sure to increase unless intelligent actions are implemented. If you were affected, you can request a PIN # form The IRS.

Do NOT ignore your mail. Check each letter as it may offer clues if accounts are opened in your name or items purchased in your name. Monitor your statements and your credit diligently .Sometimes, fraudsters will charge small amounts to test the situation and then go big. Do not give any information over the phone if you did not initiate the call. Hang up and do research on company that called and you call them. For instance, if you receive a call and they state they just need to verify the last 4 digits of your social security number, it could be someone looking for you to verify that the stolen info is correct. Han up, get your credit card and call the number on the back of the card. If it is regarding your mortgage, retirement or other account, simply look at your recent bill or statement and contact them at the number provided.

While Equifax is offering a platform of products to help those impacted, it does not apply to the other bureaus. There are other companies that offer security and you should compare what they offer to see what best suits you. While these are not free, they may be worthwhile. In addition, contact your insurance agent to see if you have ID Theft coverage.

Some are touting a Credit Lock over a Credit Freeze. A Lock offers some simplicity in thawing credit when needed but does not offer as much protection as a Freeze. That stated, one must understand that a Freeze prevents new credit from being opened in your name, but does not protect any current credit from impact. A Freeze also offers some hurdles in everyday living.  In order to thaw your credit with a Freeze, there is a cost in both time and money.  If your fridge goes up and you want to purchase a new one using the store promo and their credit, the time required for a thaw may go through after the special expires. Buying a car, house or other purchase will require a more proactive rather than spontaneous approach.

A Fraud Alert is free but only lasts 90 days and must be renewed. In theory, if a creditor pulls your credit and sees that a Fraud Alert is issued, they should contact you to verify that you initiated the request, unfortunately, this does not always occur. Regardless, it is easy to do, without cost and is another obstacle for would be thieves. Just remember to renew after 90 days.

Aside from ruining your credit and stalling your refund, thieves can create fake IDs resulting in fraudulent collections from medical, insurance, student loans, parking tickets and even worse, criminal complaints and arrest warrants.   When a retailer has a breach, it is bad. When the supposed guardian of all of your personal date has a breach, it is devastating.

2017-10-23T15:53:35+00:00