How Equifax's Security Breach Likely Affects You

Kevin Garrett |

Equifax's only purpose as a corporation is to collect and maintain people's most private financial data, and they failed miserably. Now what do we do about it? Over the course of two months, hackers made away with the personal information of as many as 143 million Americans. It is the most important financial data available on any of us - our names, birth dates, Social Security numbers, home addresses and in some instances a lot more. So, aside from the obvious question that I'd like to ask about what to do with a company like Equifax...a company that failed spectacularly at the one thing they were chartered to do....I also think we have to take a minute to address what do as one of the possible 143 million victims. Besides a rant that I'd like to have about how I suspect regulators will justify away any significant penalty for the company's pathetic stewardship of your data and mine, the really insane thing is that we as consumers can do so little about it. There is no federally sanctioned insurance or audit system for data storage, the way the Federal Deposit Insurance Corporation provides insurance and a wind-down process for banks after losses. For many types of data, there are few requirements on organizations seeking to house personally identifiable information. So with this being the ultimate example of a buyer beware world, here are a couple thoughts about the beach and what I'm telling my clients to do now to safeguard your information... Freeze Your Credit If you have not done so already, consider freezing your credit immediately at each of the three credit bureaus. A security freeze, also called a credit freeze, locks your credit file at each bureau with a special PIN that only you know. That PIN must be used in order for anyone to access your credit file, or add new credit in your name. (Note: As of now, Equifax does not believe that security PINs were accessed by hackers. If you had a security freeze in place at Equifax before the hack your PIN should still be protected. But that could change.) Credit bureaus rarely emphasize freezing your credit file because it's not in their best interest, or their clients-banks and other companies that grant credit. Instead, they recommend "credit monitoring," a largely useless and ineffective service that charges you money to tell you when your open, or unfrozen, credit file has been accessed. In essence, they tell you that you may have a credit breach problem AFTER the fact, which isn't protection against identity theft. The same is true for LifeLock, a company that has been repeatedly fined by the government for unfair and deceptive trade practices. We don't recommend anyone use LifeLock. A security freeze gives you complete control of your credit file. Unlike credit monitoring or fraud alerts, a security freeze stops an identity theft from happening rather than alerting you to potential fraud after it has happened. How To Freeze Your Account To set up a security freeze you must contact all three of the credit bureaus individually. This process can be done online or over the phone. You will be asked some questions to confirm your identity but it only takes a few minutes. We recommend beginning with Experian and Transunion as Equifax's website is currently receiving high traffic. You can freeze your credit by using the following phone numbers and links: * Equifax: (866) 349-5191 * Experian: (888) 397-3742 * TransUnion: (888) 909-8872 Depending on your state, freezing your credit can cost anywhere from $0 to $10 at each bureau. Proven identity theft victims can have this fee waived. (If you need to lift the freeze you will have to pay the same fee.) To lift your freeze you simply contact the bureau used by the lender and provide your PIN to lift the freeze for a certain period of time. This can be done online or over the phone. It may take a few days for the freeze to be lifted so be sure to do it a few days in advance. You can see if you were a victim of Equifax's hack by visiting Equifax's site, follow the link to check whether you may have been compromised by entering your last name and last six digits of your Social Security number where prompted. You can also wait to receive a letter from Equifax. Regardless, take this time to freeze your credit. Given the sheer volume of breaches in the past few years, it is likely your information has already been exposed. Freezing your credit will give you peace of mind and is a crucial step in protecting your identity from hackers. NOTE: Lifelock and the Credit Reporting agencies listed and their services are not affiliated with LPL Financial nor with Integrated Financial Group.