What Happened: Equifax data breach
The credit reporting company announced in September that the personal information of 145.5 million consumers had been compromised now referred to as the Equifax data breach.
It originally said that the information accessed included names, Social Security numbers, birth dates, addresses and – in some cases – driver’s license numbers and credit card numbers.
It also said some consumers’ credit card numbers were among the information exposed, as well as the personal information from thousands of dispute documents.
However, Atlanta-based Equifax recently disclosed in a document submitted to the Senate Banking Committee, that a forensic investigation found criminals accessed other information from company records.
According to the document, provided to The Associated Press by Sen. Elizabeth Warren‘s office, that included tax identification numbers, email addresses and phone numbers.
Finer details, such as the expiration dates for credit cards or issuing states for driver’s licenses, were also included in the list.
The equifax data breach is therefore much more serious than was reported.
See my earlier post on how to check to see if your personal data has been compromised here
Credit Freeze:
Starting Friday, a new federal law allows people to freeze and unfreeze their credit at the three major credit bureaus without being charged.
Before, it cost consumers in almost half the states $3 to $12 per bureau to freeze or unfreeze their credit reports.
Credit freezes and unfreezes with the three major credit bureaus — Equifax, Experian and TransUnion — will be free for everyone by federal law starting Sept. 21.
A credit freeze prevents lenders from pulling a person’s credit report – a key part of the approval process for a credit card or loan – essentially preventing fraudsters from opening a new account in that person’s name or the name of someone in their family.
Unfortunately, many credit card companies don’t pull your credit report before issuing a new card.
This is why you still need to keep an eye on your credit even if you have a credit freeze.
The new law comes more than a year after Equifax disclosed a major data breach that exposed the personal information of 148 million Americans and prompted lawmakers to rethink identity security.
The new law also extends how long a fraud alert remains on your credit reports from 90 days to one year. Less severe than a freeze, fraud alerts tell lenders that your personal data may have been compromised and to take extra steps to verify your identity before approving new credit.
Existing alerts on Experian reports will automatically be extended, according to Rod Griffin, director of consumer education and advocacy at Experian.
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How to “freeze” your credit report
Placing a freeze should be fast and relatively easy, although you will have to sign up for separate ones at each of the three credit bureaus.
Step 1: Go to the credit bureau websites and locate the “security freeze” link.
For Equifax: www.equifax.com/personal/credit-report-services/
For Experian: www.experian.com/freeze
For TransUnion: www.transunion.com/credit-freeze
Type in your name, address, social security number and date of birth. (Note: You can also submit a credit freeze request via phone or in writing.)
You may be asked to provide a previous address if you have lived at your current one for less than two years.
You also may need to answer a few questions about your background, including loans you’ve taken out, credit cards you hold or previous addresses to confirm your identity.
Step 2: Select the security freeze option. (Or if you already have a freeze in place, select whether you want to temporarily “unfreeze” it or remove the freeze permanently
Step 3: Jot down your PIN number, as you will need it to change the status of your freeze, like when you want to “thaw” or unfreeze it to get a loan for a new car or apply for a mortgage.
If the credit bureaus cannot sufficiently verify your identity based on the information you’ve provided, you may need to mail in copies of your driver’s license, utility bills or other supporting documentation to validate your identity and execute a freeze.
“We want to make it is as simple as possible to access that freeze, but we want to protect you at the same time,” Experian’s Griffin said. “We need to strike that balance.
Identity Theft Protection Insurance:
Dave Ramsey recommends paying for identity theft protection through Zander Insurance.
They offer a specific case worker for id theft. The cost is $75.
The Federal Trade Commission’s website, www.ftc.gov/idtheft, offers information about how to protect yourself against fraud.
Conclusion:
I believe this is a big wakeup call for consumers about the likelihood of id theft. There are options like a credit freeze or more extensive solutions like buying identity theft protection. But, beware of companies that charge too much for the same service.
Either way it is our responsibility to check our own credit reports to make sure that no one has committed id theft using our social security numbers to get new credit cards or other activity. This is the unfortunate reality of the situation.