Recently, news broke that around 143 million people had their personal information stolen from Equifax, one of the 3 big credit bureaus. 143 million people… That’s around 44% of Americans. Wow, that’s a ton of people!
This hack is a big deal. Not only has it impacted a huge number of people, the hack itself is serious. Credit agencies like Equifax hold piles of information about you. They use the data to generate credit reports that tell lenders how financially risky you are.
So the hackers had access to mountains of information. The data they stole includes social security numbers, home addresses, drivers license numbers and dates of birth.
This is serious. With this information, hackers can VERY EASILY open lines of credit in someone’s name. And when they use your identity to take out credit, they can trigger a cascade of issues that can haunt you. Until you prove that you were not the one taking out the credit, you will be on the hook for the money owed. Banks will call you. Collection agencies will call you. Your credit rating will be clobbered. Your ability to rent an apartment, buy a house, lease a car or even get a job can be impacted. It is a BIG deal.
And if this happens, it will occur silently behind your back. You may not know about it until it is too late.
To protect yourself, there are a few things you need to do.
1. Check your credit reports for free at www.annualcreditreport.com. Look for lines of credit or loans that you did not take out. The hack started 3 months ago, so make sure someone hasn’t already used the data to borrow (steal) money in your name.
2. Think about checking to see if you were hacked. If you were hacked, think about enrolling in Equifax’s Trusted ID program for free. We keep saying “think about it” because the details of this remedy are maddeningly complicated. First, you have to enter 6 of the 9 digits of your social security number in order to begin the process (like we rally trust you with this data Equifax!). Secondly, Equifax never tells you for sure if you were hacked (they will tell you if you weren’t hacked). Thirdly, the process takes at least a week to complete. And finally, by enrolling in the program, you MAY be renouncing your right to enter a class action law suit. It’s not the greatest of solutions. Go here for info about the program. And go here to see how to opt out of the class action limitation.
3. Freeze your credit. If you are not looking to take out any new credit in the near future, freeze your credit with Equifax, Experian and TransUnion. You will get a PIN number, which you use later to unfreeze your account. Unfortunately, this process is not free (the charge varies by state).
4. Set up a fraud alert. With Equifax, Experian and TransUnion. When you do this, you get a request for approval from any company that tries to give you credit. The alert only lasts 90 days, but it can be renewed.
4. Don’t forget your loved ones – especially younger and older family members. Tell them to protect themselves as well, or sit down with them and check together.
And one more thing. The hackers also got credit card numbers, so make sure you check your credit card statement carefully as well.
Equifax ($EFX) stock was (rightly) getting clobbered the day after the news broke, down more than 10% on the day.
The bigger question is why Equifax let this happen. Their ONE job is managing data. And if they can’t do that properly and securely, why are they still in business?
Finally, a scary thought. It looks like these hackers are smarter than the companies holding your data. This means we probably should no longer trust them to protect our information. Unfortunately, legislators have shown no motivation to strengthen laws and penalties to protect consumer data. This means we are all going to have to be far more proactive protecting our data than we once were…