Well, this sucks.
The last few years have been plagued with data breaches. Target, my own undergraduate University, and a few others have all had security breaches leading to the loss of personal information for innocent consumers.
This Equifax data breach is one of the worst.
An estimated 143 million Americans are impacted, or 44% of the US population. The worst part, you don’t even need to be an Equifax customer in order to be impacted.
Who Is Equifax?
When it comes to your credit score, there are three credit bureaus that run all of America’s credit reporting. Transunion, Experian and Equifax. Every time you apply for a credit card (to get those airline miles), apply for a mortgage (possibly for real estate investing), or apply for a car loan – one or more of these companies are contacted to understand your credit.
Sadly, this mean, many of the people affected have never heard of Equifax or gave them their information. Equifax has been collecting your whole credit history for you, and companies trusted them to store and provide the info when needed. To make it worst, social security numbers, names, and birthdays were lost, meaning someone can open credit in your name or file your taxes and get your refund.
This is why this breach really sucks. There was virtually nothing you could do to stay away from Equifax. There are also several issues about how they have been and are handling the breach, but that’s a discussion for another day.
$#%@! So, what do I do now?
Equifax is offering you some assistance, but given what just happened you may or may not be comfortable going back to them.
Start with the FTC’s response to the breach. I trust them because it’s the government body that regulates this. Wherever you get your information (including Wealth Noir), make sure they are reputable. Data breaches like this are a great place for scammers to convince you the sky is falling in order to sell you umbrellas. Stick with reputable companies as you do what needs to be done.
Here are the next steps you should take to minimize any personal impact:
Check if you were impacted (aka caught up)
Equifax has setup www.equifaxsecurity2017.com for you to see if you were affected (I don’t 100% trust their assessment and assume would assume something leaked). They also have more information about the breach and are offering free credit monitoring services for a year. If you do nothing else, take their free services!
Check your Credit Reports
Everyone is granted a free annual credit report to make sure everything is correct. Head to AnnualCreditReport.com for your free report.
I am a big believer of regular credit monitoring, and there are a lot of companies offering regular reports for free. My personal goto is Credit Karma. They were one of the first non-scam free sites and I like their interface. I’ve also heard good things about Credit Sesame. Several bank and credit cards now offer this also, including Credit Wide by Capital One.
You want to go over the report regularly and make sure there is nothing weird. You want to make sure there aren’t credit requests you don’t recognize or new accounts in your name. Make it a monthly habit to stay on top of this.
Consider starting a Credit Freeze or Fraud Alerts.
A credit freeze stops anyone from accessing your credit report. If someone is trying to open an account in your name, the freeze would stop them from being able to access the credit report and cause their application to be denied.
There may or may not be a fee (Equifax said they will refund fees for their locks) and a time delay, so take that into account. Find more details on a Credit Freeze from the FTC. It requires contacting each credit bureau (TransUnion, Experian, and Equifax) individually.
Fraud alerts are another free service you can get from credit bureaus. Find out what the FTC has to say about getting one setup.
Monitor your credit cards and bank accounts
Again, you should already be doing this (I’ll admit, I’m bad at it), but you want to make sure fraudulent charges don’t show up. This could happen months after the breach. You can also request a new card number for your credit and debit cards for added protection.
Using a service like Mint or Personal Capital can help put all your charges in one place for you to see.
File your taxes early
You might not have thought about this, but after having worked for the IRS as a consultant in a previous life, this is a very real thing.
Anyone with your personal information can file your tax return with fraudulent information and have the IRS mail them your refund. It does happen and an easy way to prevent it is to file before the fraudster. Simple as that.
Stay Calm and Be Proactive
In our digital society, these breaches will continue to happen. There are more services and products aimed at helping manage the fall out, but best practices still win out. Check your credit report, check you card statements, be careful who you share information with, and look into monitoring services.
Have a tip or some info I missed? Leave a comment and let the community know.
Damien is a Personal Finance Nerd and former Facebook Product Manager who started Wealth Noir to help others find wealth. He actively invests in stocks, robo advisors, and cryptocurrency … but loves real estate investing. He holds an MBA from MIT and a Comp Sci & Econ degrees from Unv. of MD. He’s a proud dad, which is his biggest accomplishment.
Shana Williams says
Damien, what happens if someone does file your tax return in your name? What are the next steps?
Damien Peters says
I’m actually not sure. I believe the IRS will contact you and let you know it happened. Then I believe you have to prove your identity in order to get the refund. I think they would go after the person separately.