One year ago this month, Equifax announced they had experienced a data breach, which exposed personally identifiable information (PII) of almost half of the country. This included birth dates, home addresses, and social security numbers. The most sensitive information that identifies you as an individual was exposed due to negligence at the hands of Equifax. The issue could have easily been prevented if they had applied a simple update to their servers.
Moving Forward
Today a new law goes into effect: the Economic Growth, Regulatory Relief, and Consumer Protection Act. Part of the language in this bill allows you to freeze your credit for free with the three credit bureaus (Equifax, TransUnion, and Experian). Normally they charge ten dollars for every freeze, but moving forward it will be completely free. A credit freeze locks down your credit and does not allow institutions or lenders to view your credit, which could help prevent identity fraud. When you request a credit freeze, the credit bureaus are required to lock your credit quickly. In fact, a request placed over the phone or online will go into effect almost immediately. Requesting a credit lock via mail will of course take longer. Additionally, this new law extends fraud alerts from 90 days to one year, so if someone does try to use your information to apply for a credit card, loan, mortgage, etc., then the bureau is required to reach out to you and verify your identity.
Freezing your credit can be more complicated than it seems. For example, if you request your credit to be frozen with one bureau, it won’t apply to the others. If you are worried about your credit, you will need to contact each bureau individually and freeze your credit with each of them. Once your credit is frozen, you will be sent a PIN via mail, which you will then use to unfreeze your credit if and when you apply for a new account. In addition to freezing your own credit, the new law allows parents or guardians of children who are under the age of sixteen to freeze their child’s credit file. The process will generally work the same way, but options for freezing a child’s credit currently vary depending on which state you reside in.
It’s also important to note that there is an option to “lock” your credit, which is different than freezing your credit. “Lock & Alert” is a feature that can be done via the credit bureau’s mobile app. The main difference is you can lock and unlock your credit with the touch of a button, while freezing has a more lasting effect; however, using the “Lock & Alert” option can also carry additional fees.
Taking Action
Should you freeze your credit? That will depend on your situation. Should you monitor your credit? Absolutely. In today’s digital age, it is more important than ever to ensure that you’re protecting yourself in every way possible. Whether it is being aware of the next phishing email or enabling two-factor authentication wherever possible, there are multiple safeguards that you can use in order to protect yourself from potential cyber threats. Some would say that it pays to be paranoid, which I would agree with to an extent. For me, it’s hard to fathom failing to update a server knowing full well that if you don’t you leave yourself vulnerable. Equifax (and TransUnion and Experian) carry the most sensitive information about you that exists, so why would they be so negligent? You can take all the necessary precautions to protect yourself but if companies have data breaches outside of your control they need to be held accountable.
The topic of security expands beyond the three credit bureaus and applies to almost every company today. It’s important to question the data that companies collect about you and understand exactly how they are using it. I would expect more companies to be regulated in this manner in the future because as of now the “Terms & Conditions” you accept can be extremely daunting. You should always be cognizant when accessing things online, but it’s important to know where to draw the line. With the digital age exponentially expanding, arming yourself with the necessary knowledge will be one of your best tools for defense. It may be overwhelming for some, but time waits for no one. Don’t be intimidated by the online world.
If you have questions about protecting yourself from identity theft, please give us a call or send us a message. If you are worried about the state of your credit and suspect that you are a victim of identity theft, here are some helpful resources on freezing your credit with Equifax, TransUnion, and Experian. If you have any questions about this article or how Total Wealth Planning keeps client data secure, please send me an email at sean@twpteam.com.
