By now you’ve heard of the epic Equifax data breach. It’s a scary time to be a consumer – the breach has impacted over 143 million Americans. But we aren’t helpless. In the wake of this possibly calamitous occurrence, there are some steps we can take to fortify our personal and financial data security.
Read on for suggestions on how best to weather this storm, and to reinforce protections to your personal information.
The first step consumers can take to protect their data is to initiate a credit freeze. A credit freeze is a way to seal your credit reports.
Once you institute a credit freeze, you are provided with a personal identification number (PIN) that only you know. When you have a credit freeze active on all of your credit reporting accounts with the big agencies (Equifax, Transunion and Experian), the bureaus are not supposed to release information on your credit report to any new company. The freeze has no impact on your current credit lines.
This means that if a criminal submits an application for new credit or loan in your name, the credit freeze prevents access to your credit report. Thus, any new account request or inquiry will be rejected.
Here you have one surefire way to add a layer to your identity protection strategy. In the event that you want to apply for new credit, you must first “thaw” your credit freeze. Short of changing your social security number and date of birth, this step is probably your best protection against identity theft.
One crucial point to note here: never, I repeat, NEVER lose or misplace your PIN. So long as you have access to your PIN numbers, you can freeze and thaw your credit reports very quickly.
For a detailed, step-by-step guide on how to freeze your credit accounts, go to Clark Howard’s article on the topic.
The next defensive step we can take against identity theft and credit card fraud is to work with a company that specializes in identity theft protection. For this piece of my personal and financial data security, I use LifeLock.
Through the LifeLock identity theft protection system, a heightened level of vigilance and understanding of your particular account transactions is applied to your credit reports. Any activity that appears fraudulent, like applications for various credit and non-credit related services, is detected. You then receive a phone, email and text alert of the suspicious activity. LifeLock keeps constant tabs on your credit reports so you don’t have to.
LifeLock offers several options when it comes to layers of protection. But, for around $10 per month, the company provides identity theft monitoring and a handful of other benefits. Some of LifeLock’s added perks include:
- Stolen Funds Replacement (meaning if you lose funds due to identity theft and LifeLock restoration services is unable to recover the funds, insurance provides coverage for your losses up to your plan limits);
- Personal Out-of-Pocket Expenses (meaning if you incur expenses such as document fees, lost wages and travel costs relating to identity theft, the insurance provides coverage for your losses up to your plan limits); and, most, notably,
- The $1 Million Dollar Service Guarantee (meaning in particularly complex cases, if LifeLock’s efforts require outside legal counsel and subject matter experts to assist you in the restoration of your identity, LifeLock will obtain the necessary services on your behalf).
One thing I appreciate about LifeLock are the alerts I receive if it appears anything out of the ordinary is happening with my financial transaction behavior. These alerts force me to go into the system and review transactions. In fact, they are so good at what they do, it borders on annoying because I receive so many alerts during a week’s time.
Another option that I use, and one that is free of charge, is Credit Karma. With Credit Karma, you have access to your credit scores and reports from TransUnion and Equifax, along with weekly updates. If an important change happens on your TransUnion account, Credit Karma will send you a credit alert, which can help you spot identity theft.
Whether or not you use LifeLock, Credit Karma or a similar service, you should always check your online accounts several times per week. It pays to keep track of your financial activity on a regular basis. This level of financial caution is required in today’s world of cyber finance and cyber-crime.
One note – I believe consolidating your investments and banking into as few places as possible is an important security strategy. Think about it. If you have three or four banks and two or three brokerage firms that you work with, it can be a tall order to diligently monitor so many different accounts. Of course, I’m not saying you want only one account, but try to choose fewer, better institutions and limit your total number of accounts as much as possible.
After any data breach, and especially after one with the magnitude of the Equifax breach, we as consumers must remain vigilant. This includes being leery of telephone calls from unknown numbers and avoiding falling victim to email scams. Remember, never provide personal information to anyone who calls or emails you. Err on the side of caution, remain vigilant, and consider the protective steps above, and you should weather this storm just fine.
Cover Image: LA Times