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As identity theft and data breaches become ever-more-common occurrences, protecting personal information and monitoring accounts for fraud have become increasingly important practices. In the aftermath of the 2017 Equifax breach, in which the personal information of 143 million Americans was stolen by hackers, it has become absolutely essential to take a proactive approach to your personal security. Fortunately, there are many ways to monitor your credit and reduce your risk of suffering from identity theft. Below are some steps that you should consider taking in order to better protect your personal information.
Assume that your information has been compromised.
The 2017 Equifax data breach alone affected more than one-half of the adult population of the United States, so there is a reasonably good probability that your personal information has, in fact, been exposed. Therefore, the most prudent course of action is that you should assume that your personal information has been compromised and take appropriate precautionary steps.
Closely monitor your credit accounts.
The information accessed by hackers can include not only personal information like birth date and Social Security number, but also credit card information. This means that hackers may be able to open new credit accounts on behalf of victims while also attempting to use existing credit accounts. You should consistently and closely monitor all of your credit accounts for abnormal activity. Thieves will often wait for months before using stolen credit information in order to lull victims into the false security that their information was not jeopardized. For this reason, you should monitor your credit accounts indefinitely and diligently in order to spot any fraud attempts.
Obtain a free copy of your credit report.
All Americans are entitled to one free credit report from each of the three primary credit bureaus (Experian, Equifax, and TransUnion) each year. Clients should visit AnnualCreditReport.com to access their free credit report and check for new credit accounts opened in their names. We recommend that clients pull one report from one of the credit bureaus every three to four months to continually monitor their credit.
In addition, many credit cards and personal finance websites provide you with free credit scores as an enrollment benefit. While these have less detail than the credit reports referenced above, you can check your credit score more often and watch for any changes or fluctuations that might indicate it’s time to request a full report.
Consider putting a freeze on your credit.
Probably the most effective way to protect yourself from the potential negative impacts of the Equifax data breach is to put a freeze on your credit. A credit freeze places tight restrictions on who can view your credit. Credit card companies, landlords, mortgage lenders, and many other entities pull credit reports when vetting applications for products or services. Placing a freeze on your credit will make it impossible for these entities to view your credit report unless you personally “thaw” your credit to provide them access, thereby making it impossible for thieves and fraudsters to open new credit accounts in your name.
As of September 2018, the Federal government began requiring companies to offer credit freezes and thaws for free. To be most effective, you will need to place freezes at all three bureaus; setting up a freeze at one bureau does not carry that protection over to the other bureaus. When you enact a credit freeze, you will be provided with a PIN that you will need in order to lift the freeze in the future.
If you would like to put a freeze on your credit, you should contact each of the three credit bureaus:
Consider enrolling in a credit monitoring service.
Credit monitoring services will help keep an eye on your credit on your behalf, alerting you to changes or potential fraud. They essentially function as an early warning system that something may be amiss, allowing you to take steps to correct any potential problems. Credit monitoring services do not actually prevent identity theft, however: they don’t correct errors on your credit report, prevent fraudsters from applying for credit in your name, or take steps to protect you beyond alerting you to possible problems.
For those who are already monitoring their credit in the ways outlined in this Navigator, a credit monitoring service will not give you significantly more protection. For those with limited time or capacity to monitor their own credit or those who have already been a victim of identity theft, a credit monitoring service can be well worth the cost, which can be more than $30 per month. Clients can sign up for credit monitoring from trusted services such as LifeLock, TransUnion, or Experian.
Data breaches, identity theft, and fraud are an unfortunate part of modern life, and there is no way to eliminate these risks entirely. However, addressing issues immediately when they arise can help to minimize the repercussions from such events. In addition, there are actions that clients can take before a breach occurs that may further reduce the risk of being a victim of identity theft or fraud. We encourage clients to review the Navigator that we wrote about the risks related to identity theft and measures that can be taken to minimize and mitigate these risks. And of course, if you have additional questions or concerns about this data breach or identity theft more broadly, please do not hesitate to reach out to us.
This article is prepared by Pekin Singer Strauss Asset Management (“Pekin Singer”) for informational purposes only and is not intended as an offer or solicitation for business. The information and data in this article does not constitute legal, tax, accounting, investment or other professional advice. Although information has been obtained from and is based upon sources Pekin Singer believes to be reliable, we do not guarantee its accuracy.