Last week startling news was revealed to Americans all across the country. Over the period of two and a half months, hackers were able to steal incredibly large amounts of data straight out of Equifax’s servers. Equifax, one of three large companies that are responsible for calculating your credit score, was compromised. If you’ve gone through a previous headline hack like the Target one or perhaps even the Sony Pictures one, you may think you know how to best respond to this. Sadly, this hack goes far beyond just simple credit card numbers. Though 200,000+ credit card numbers were stolen in the hack, much more valuable information was stored on their servers.
Equifax is one of America’s three major credit reporting agencies. These companies calculate your credit score which use a variety of personal information. As Equifax deals with your credit score, they work mostly with your social security number, past employment history, your addresses and even your driver’s license numbers. The end result is over 143 million Americans are believed to have had their personal information, such as social security numbers, leaked by this hack. There is no telling how much damage this will do to individual Americans over the coming years.
To help understand the scope of this hack, we should consider how many Americans are impacted. The United States Census Bureau estimates that there are 320 million Americans living in the United States as of 2016. However this number includes children, and others who do not use their credit ever. So it’s possible that more than half of all adult Americans have had their personal information leaked in this hack. It’s an incredibly high number and the leaked information only makes it so much worse. While information like passwords or your credit cards can be changed, your social security number is very difficult to change and the United States Government has no response to a hack this large. This means that the information leaked in this hack can still be used decades later, after many have forgotten about this breach.
But what can someone do with my social security number? Sadly, a lot. When most people think about identity theft they often think about things such as posing as you to take money out of your account, but your social security number is a key to your entire life. For instance, if you want to sign up for a wireless phone service you will need your social security number. Or if you want to sign up for a credit card or get a loan from a bank or get a driver’s license. All of these require your social security number. A person can effectively use your identity with just that simple 9 digit number and your real name.
What can we do to protect ourselves? We are going to go through and explain the possible solutions for you. Unfortunately, there is no simple solution such as getting a new credit card and this hack could possibly follow you for the rest of your life.
1. Am I affected? How can I know?
We recommend going to Equifax’s main website which will link you to the website they’ve set up to help you check if you’ve been compromised. Understandably, if you’re hesitant to send your personal information over the internet to a company that has been previously compromised, they are also operating a call center to help you check through that method.
You may have heard that Equifax is mailing letters to those affected, however Equifax has since clarified that this is only true for those who had their credit card numbers revealed, or those who had information leaked through a credit dispute. This means if you’re one of the 143 million Americans affected by this breach you will never receive any other notice outside of the website or call center. Frustratingly, Equifax expects you to be aware of the breach and to figure out on your own whether you’ve been affected.
2. What if I’ve never used Equifax?
Even if you’ve never used Equifax, chances are that if you’re an adult American that has any credit, you can be affected by this breach. Equifax does not deal directly with American consumers like you or I, but instead they deal with financial institutions like banks and credit card companies to determine what you are eligible for. This means that even if you’ve never even heard of Equifax, they could have all of your personal information. This is why this breach is such a big deal and why you cannot ignore it.
3. Should I sign up for Lifelock? Or use Equifax’s identity theft monitoring service?
As a response to the hack, Equifax is offering their TrustedID identity theft monitoring solution to all Americans for a year, absolutely free of charge. The service claims to help protect you from having your identity stolen and will automatically check your credit reports for any strangeness. This solution seems fantastic on the service and as though it’s all you need. Unfortunately, this is simply not the case. While you probably should use the service for the first year, since it can help you. It isn’t a silver bullet and many will not be able to afford the high costs later on. This remains is equally true of Lifelock.
These services claim to offer you the ease of mind by doing everything for you, but they actually cannot. Recently, Lifelock was fined $12 million dollars by the FTC for failing to adequately protect consumer’s information and for having deceptive advertisements. The truth is that these services simply cannot protect you from all of the dangers and offer up a lot of promises they simply cannot keep. For instance, while monitoring your credit report can help prevent fraudulent credit cards and loans being taken out in your name, many problems will not show up in your credit report until it is too late. If someone signs up for an account with Verizon Wireless with your social security number and refuses to pay, it will not show up on your credit report until a debitor puts it there. By then the damage has already been done and you have a headache ahead of you. The same is true if someone commits a crime with your social security number. A problem no one wants to deal with.
It may be even harder for you to want to sign up with Equifax’s identity theft service TrustedID knowing that it was them who got you in this situation to begin with. While the first year is free, this hack can haunt you for the rest of your life. The information leaked in the hack will still be relevant 20-30 years from now. Unless you plan on paying for these services for the rest of your life, they simply aren’t a permanent solution.
4. If I monitor my credit report am I safe?
As explained above, this can help you prevent fraudulent credit cards and bank loans being taken out in your name, they cannot stop someone from registering you for a driver’s license in another state and committing crimes with it. Nor will it prevent someone from putting debt in your name. Though unlike the previous one, this can be done for free by going to AnnualCreditReport.com or by using a service such as Credit Karma.
We recommend that you always consult your credit report, even if you believe you are unaffected by this breach as it will help you remain vigilant for any future threats to your credit score which is key to getting loans, credit cards and even your mortgage rates. However it is also important to know that you are still vulnerable in other ways even with this method. If you go through AnnualCreditReport.com you will only be able to check your credit report for free once a year. If you use a service such as Credit Karma, you will be able to check your credit score much more frequently, but credit card companies will send you ads for their cards.
5. What if I freeze my credit report?
You can actually lock your credit report with a PIN number which will prevent any creditors from being able to access your credit report unless you unlock it for them. This is perfect when a financial institution needs to check your credit score for a credit card, loan, or even a mortgage. If you are the one actually signing up, you can simply call up the credit report companies like Equifax or Experian with your PIN number and unlock your credit report. The creditors are required by law to inform the others of the locks on your credit reports meaning that you will only need to contact one of the three big creditors.
This solution does have its drawbacks, however. If you cannot remember your PIN, it will be very difficult for you to reverse the freeze and will prevent you from signing up for any credit cards or other things. Perhaps even worse, however, is that freezing your credit report may not be free depending on where you live. Some states have laws that require the freezing and unfreezing of credit reports to be a free service, however others can charge you up to $10 to freeze your credit report and then another $10 to unfreeze it later on. Not a cheap option for those on a budget. Thankfully there is legislation being pushed to help fight those fees.
For more information on locking your credit report we recommend this FAQ from the FTC.
Stick To It!
No matter which method you choose, it’s vital that you keep an eye on your financials and stick to this plan. This hack is a worst case scenario for many Americans with the threat of danger lingering for many more years. Even if you think the danger has passed there’s a chance the hackers with your data could strike.
In the meanwhile, we recommend you keep your eye out for one of the many class action law suits against Equifax for this breach. While the money will do little to give you ease of mind, hopefully more lawsuits will prevent a similar situation from happening in the future.