Clarifi has always counseled our clients and those we educate about the importance of monitoring your financials on a regular basis: reviewing monthly credit card and bank statements, and requesting your full credit report from the three major bureaus every year.
Most of us woke up last week to the alarming headlines about a massive security breach at Equifax—one of the nation’s leading credit reporting bureaus—that exposed the sensitive personal information of 143 million Americans.
All of this has prompted a great deal of concern and headlines about what consumers can do in response. The fact is that we live in a world where more and more financial transactions take place entirely online, and nearly all of our information is stored somewhere electronically.
While details of the Equifax story are still unfolding, we’d like to share some of the advice Clarifi has developed and provided our clients with over the years.
These are some signs to look for, to determine if you have been a victim of identity theft (courtesy of our friends at the Consumer Finance Protection Bureau):
- Accounts on your credit reports that you didn’t open
- Incorrect personal information on your credit reports
- Credit inquiries from companies you’ve never contacted
- Wrong amounts showing on your accounts in your credit reports
- Money is missing from your bank account
- Bills that you used to get are no longer being delivered to you
If you know or suspect your personal information has been hacked or stolen, here are some immediate steps Clarifi recommends:
Place a fraud alert on your account. You can do this by contacting one of the three major credit reporting agencies (Equifax, Experian, and Transunion). The credit reporting agency must tell the other companies about your alert. It’s free, and this alert can make it harder for an identity thief to open more accounts in your name. When you have an alert on your report, a business must verify your identity before it issues credit, so it may try to contact you. The initial alert stays on your report for at least 90 days – and you can renew it after 90 days.
It’s also strongly recommended that you request a free credit report through annualcreditreport.com. All consumers are entitled to one free credit report every year from each of the three major credit reporting agencies. Clarifi recommends to stagger your requests for these reports so that you get one every four months; for example, request your free report from Equifax the first month, Experian four months later, and TransUnion four months after that. Make this part of your annual financial routine, so you can stay on top of any irregularities and respond to them quickly.
An added security step would be to issue a “credit freeze” or security freeze at each of the three major bureaus. You can do this over the phone or sign up directly at their websites: Equifax, Experian and TransUnion – and you’ll need to pay a small fee ($5-10) to each bureau. With this step, the credit reporting bureaus are instructed not to release your credit report to any company except the ones where you currently hold an account. (You can temporarily lift the freeze using a special PIN number, in the event you wish to open a new credit account).
Monitor your financial accounts regularly. This incident drives hope this recommendation even more. Always review your monthly statements (even if it seems tedious, you can catch important things that way!) and get online access to banking and credit accounts, so you can check things weekly, or as often as needed.
See if you can get regular free credit score updates from your bank. Many bank accounts and credit card accounts now offer free credit score updates to consumers. This can be a great way to keep an eye out for any unexpected changes, and look into them right away.
The fact is there is no way for consumers to “opt out” entirely from the credit reporting bureaus; they receive our information directly from banks and other companies. And clearly there is no 100% hack-proof system, at least at this time. So in the absence of total security the best thing we can do as individual consumers is pay close attention, stay on top of our statements, and act quickly when we notice or even suspect something is wrong.
For more information and advice on responding to the Equifax data breach, the Federal Trade Commission has posted a helpful story on their website. You’ll find more helpful stories in the New York Times’ Smarter Living and Your Money sections.