Identity Theft and the New Tax Bill

Will Congress Overhaul Credit Reporting Laws?

The 2017 filing season could be the worst yet for tax-related crime. With widespread confusion about the new tax law, IRS budget cuts, and a record-breaking year for data compromises, there’s an opening for fraud that should be serious cause for alarm, but doesn’t seem to be.

The bottom line: you should be concerned.

Last tax year, the IRS stopped 787,000 confirmed identity theft returns, totaling more than $4 billion. For the same nine-month period in 2015, the IRS stopped 1.2 million confirmed identity theft returns, totaling about $7.2 billion. There were many other widely reported wins. But what did not get reported was how much money scammers stole. Given the IRS’s estimate that 2016 would see a loss of $21 billion via fraud, one wonders.

That was then. The compromise of 143 million people in the Equifax breach changed all that. It included Social Security numbers—compromised SSNs being the most common “pre-existing condition” of crimes committed against the U.S. Treasury, and as such that breach poses a significantly increased threat difference over previous years.

We’re looking at a far more significant threat of tax-related fraud in the 2017 filing season than ever before. Compounding this situation, the IRS is less able to fend off the threat of identity-related tax fraud than it was last year.

Overworked

I know it’s risky to publicly sympathize with the nation’s most hated federal agency, but I can’t imagine it’s been much fun to work at the Internal Revenue Service since Congress passed its new tax bill (note that I’m not suggesting there was ever a time I could imagine it might be fun to work at the IRS).

With the new tax year just begun, the agency is racing to find real-world applications for the numerous changes to the tax code conceived in the hothouse of Congress, where ideas do not always (or perhaps even very often) jibe with real life, and the daily concerns of actual Americans has more the feel of an annoyance than a matter of, say, central importance.

There are significant logistical challenges posed by the new tax bill. First order of business is getting the changes in place that need to be implemented now, for instance the coding to adjust withholding, which the IRS hopes will make its first appearance on pay stubs as early as February. There are other provisions that affect the here-and-now, like the new trigger for healthcare deductions, as well as a decent-sized punch list of smaller changes—all of which needing the immediate attention of a greatly diminished staff in the coming months.

Underpaid

Remember those cuts back in 2010? The agency was denuded of $900 million, which led to the loss of 21,000 jobs. That’s a major problem right now.

The last time there was tax overhaul like the current one, “Walk Like an Egyptian” was on the radio and cable TV was just finding its way into the suburbs. Today, Twitter feeds are reloaded continually, and late-show hosts joke about the size of the presidential button.

In 1986, the IRS got a budget increase to accomplish the increased workload, but this time around, “the House and Senate appropriations bills for 2018 would cut the IRS budget by an additional $155 million and $124 million, respectively,” according to the National Treasury Employees Union.

What You Can Do

Wait times were more than an hour last year. The helpline matters because people don’t read tax bills, or even news stories about them. The questions will be many—far more than usual. They will be on a host of topics. People will call in reaction to good, bad and neutral information.

Is there nothing to worry about till this time next year? Do I need to fill out a new W4? Is my tax bracket the same?

The only question that matters is this one: What’s the best way to avoid becoming a victim of tax-related fraud. The answer: file your tax return as soon as you have all the necessary documents to get the job done.

While it’s important to sort out what’s what with regard to the coming changes in our nation’s tax code, it’s crucial to take a look at the simple fact that people are confused, and that creates a beneficial state for fraud to flourish.

For time being, the only “solution” is beating scammers to the punch.

With everything that the IRS needs to do to function well, budgetary issues necessarily come to the fore. We should all be voicing concern about the agency’s ability to safeguard taxpayers from refund fraud given the current situation. And we should all be doing everything we can to protect ourselves in a hostile environment.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

 

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The post Identity Theft and the New Tax Bill appeared first on Credit.com.

The Guide to Freezing and Thawing Your Credit Report

iStock

The recent Equifax data breach that exposed the names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers of about 44 percent of the current American population has many consumers now rushing to freeze their credit scores. However, many consumers may not grasp what that really entails.

In a recent survey by CompareCards.com, a subsidiary of MagnifyMoney’s parent company, LendingTree.com, 78 percent of respondents said they had never put a freeze on their credit reports.

When you freeze and thaw your report, you are preventing anyone else from opening a credit account under your name without your knowledge. It’s a smart way to defend yourself against some cases of identity theft. Massive data breaches like the one that hit Equifax are stark reminders of the importance of protecting sensitive information from potential fraudsters, but that doesn’t mean you should wait until your information is compromised in a data breach to act.

“We should all be vigilant,” says Eva Velasquez, president of the Identity Theft Resource Center. “Being vigilant about your identity is just a part of the world that we live in. If being involved in a data breach is the catalyst that brings that to the top of your mind, then we can see that as a positive.”

What a credit freeze does — and doesn’t — accomplish

A credit freeze, or security freeze, is a tool consumers can use to restrict access to their credit reports. The freeze makes it harder for criminals to commit financial fraud using your information.

The freeze seals your credit reports so that new requests won’t be processed without your approval. You will need to use a personal identification number — only you will know it — to lift or thaw the freeze before creditors can again have access to your credit report. A freeze adds a layer of security, since most creditors won’t extend new credit without seeing your report.

You will need to request a credit freeze with each of the big three reporting bureaus — Equifax, TransUnion and Experian — for the freeze to have the biggest impact.

Freezing your credit report will NOT:

  • Impact your credit score
    • A credit freeze will have no impact whatsoever on your credit score. Freezing your credit will neither raise nor lower your score.
  • Restrict existing creditors’ access to your report
    • Your current creditors, government agencies or debt collectors acting on behalf of those parties will still have access to your credit report if you freeze it.
  • Keep you from opening new credit
    • You will still be able to use your credit report to do things like open a new credit account, apply for a mortgage, rent an apartment or take any other action that calls for a credit check. But you’ll need to lift the temporary freeze before lenders can gain access to the report. If you know you’ll be doing any of those activities, you can temporarily lift the freeze for a certain party or a length of time, but it may cost you money to do so.
  • Prevent a criminal from committing fraud involving your existing accounts.
    • Freezing your credit report won’t prevent you, or any would-be thieves, from using your existing credit accounts. You will still need to vigilantly monitor all of your personal bank, credit and insurance accounts for fraudulent transactions or other signs of fraudulent activity.
  • Stop you from receiving prescreened credit offers
    • Freezing your credit report won’t stop lenders from sending you prescreened credit offers, as they prequalify new customers using a “soft pull.” A soft pull doesn’t show up on your credit report or harm your credit score. Banks buy the names of people who meet their credit criteria from credit bureaus to create their prequalification lists. So when you are prequalified, it just means you’re on a list somewhere. If you want to stop receiving such credit offers, call 888-5OPTOUT (888-567-8688) or ask to be excluded here.
  • Protect you from all forms of ID theft
    • A credit freeze can help to prevent financial fraud, but it will still leave you vulnerable to many other kinds of fraud. When criminals obtain important and sensitive information like your Social Security number as they did in the Equifax breach, they can use this data to commit criminal, medical, tax and employment theft, too. For example, a thief could use your Social Security number to file a tax return and claim a fraudulent refund, or use your personal information to obtain medical care or employment without your knowledge. Remain vigilant to protect yourself from other forms of fraud. Pay careful attention to any mail or phone calls from a medical office, government agency or other entity. They may be reaching out to verify your identity or report that someone else is attempting to commit fraud in your name.

How to freeze your credit report

You must go through a separate process with each of the three major credit bureaus to freeze your credit report.

Equifax

Equifax Complete Advantage Plan You can freeze your Equifax credit report online, by phone or by mail.

  • Online: In a statement issued in The Wall Street Journal on Sept. 27, Equifax said it would offer a new service that permanently allows consumers to lock and unlock their credit reports for free. The service is set to debut by Jan. 31, 2018.

    In the meantime, you can still freeze your Equifax score the traditional way, by visiting the Equifax security freeze site. You will first need to fill out a form with your personal information, then make any payment required by your state. Equifax’s site may be experiencing high traffic as a result of the recent breach, so it may not be able to process your request right away. If that is the case, try one of the other methods or try again online in a day or two.

  • Phone: Call 1-800-685-1111 (New York residents call 1-800-349-9960), and you should be connected with an Equifax representative who will verify your personal information and assist you with your credit freeze request.
  • Mail: Request your credit freeze by certified mail. If you’re a victim of identity theft, this is the channel you will need to use; your request must be submitted in writing with relevant documents, like a police report or other documented proof of theft, to have your fee waived. Write a letter to the reporting agency requesting the credit request and send it to the following address: Equifax Security Freeze/P.O. Box 105788/Atlanta, GA 30348

TransUnion

TrueIdentity You can freeze your credit TransUnion report online, by phone or mail, or by using TrueIdentity,

  • Online: Go to the TransUnion security freeze site. You will need to log in or create a TransUnion account before you can submit your request online.
  • Phone: Call 1-888-909-8872 and a TransUnion representative should verify your personal information and assist you with your credit freeze request.
  • Mail: Request your credit freeze by certified mail. Write a letter to the reporting agency requesting the credit request and send it to the following address: TransUnion LLC/P.O. Box 2000/Chester, PA 19016
  • TrueIdentity: TransUnion offers a free credit report monitoring service called TrueIdentity. The service allows users to lock and unlock their credit report with a swipe on their mobile device or a click online. It gives access to unlimited TransUnion Credit report refreshes, and alerts you if an entity pulls your TransUnion credit report.

Experian

Experian You can freeze your Equifax credit report online, by phone or by mail.

  • Online: Go to the Experian security freeze site. Select “add a security freeze,” then “apply online” and you’ll be redirected to a form requesting your personal information. Submit the form and make any payment required by your state to freeze your report.
  • Phone: 1-888-EXPERIAN (1-888-397-3742). Press 2 to be guided through prompts to request a security freeze.
  • Mail: Request your credit freeze by certified mail. Write a letter to Experian requesting the credit request and send it to the following address: Experian Security Freeze/P.O. Box 9554/Allen, TX 75013

How to thaw your credit report with each agency

Equifax

You can temporarily thaw your Equifax credit report via mail, online via Equifax’s security freeze site, or by calling 1-800-685-1111. (New York residents dial 1-800-349-9960.) Send mailed requests to the following address:
Equifax Security Freeze/P.O. Box 105788/Atlanta, GA 30348

TransUnion

You can temporarily thaw your TransUnion credit freeze by mail, online or via TransUnion’s credit freeze site, or by calling 1-888-909-8872. Send mailed requests to the following address: TransUnion LLC/P.O. Box 2000/Chester, PA 19016

Experian

You can temporarily thaw your Experian credit report by mail, online via Experian’s security freeze site, or by calling 1-888-397-3742. Send mailed requests to the following address:
Experian/P.O. Box 9554/Allen, TX. 75013

How much a credit freeze will cost you — by state

The protection isn’t free. Each time you freeze your report, temporarily lift a freeze or permanently end one, you may have to pay a fee. In the wake of the Equifax hack, consumer advocacy groups and some lawmakers have renewed their efforts to allow data breach victims to sign up for free credit freezes in their states.

“It is outrageous that the credit bureaus charge us fees to prevent identity theft when we didn’t even give them permission to collect our information in the first place,” Mike Litt, a consumer program advocate with the U.S. Public Interest Research Group, said in a statement a little over a week after the Equifax data breach was made public.

Sens. Elizabeth Warren (D-Mass.) and Brian Schatz (D-Hawaii) introduced the Freedom from Equifax Exploitation (FREE) Act on the same day. The act is intended to make actions related to freezing credit reports free for all consumers nationwide.

Until the proposed act wends its way through both houses of Congress, the amount you may pay to freeze, thaw or permanently end a credit freeze will vary from state to state and may be up to $10.

There is a silver lining for some. If you can present documentation showing you are a victim of identity theft at the time you place a freeze on your credit, most states will waive fees.

You can check what your state will charge you for each action below. Multiply the amount by three because you will need to pay each credit bureau.

In a Sept. 15, 2017, statement addressing the recent breach, Equifax said it would waive security freeze fees for all consumers through Nov. 21 and refund those who have paid to place or remove a credit freeze since 5 p.m. on Sept. 7, just after the breach was announced.

Nearly every state has legally identified definitions of a “protected consumer,” which may be a minor, an elderly citizen, a service member, a spouse of a victim of ID theft, a medically incapacitated person or some other distinction. Depending on the state, a protected consumer may pay a different amount or have his or her fee waived. The National Conference of State Legislators has more information on whom each state counts as a protected consumer, here.

State

Consumer Category

Freeze

Thaw

End Freeze

Alabama

Victim of ID theft

free

free

free

Senior (65+)

free

$10

$10

All other consumers

$10

$10

$10

Alaska

Victim of ID theft

free

free

free

All other consumers

$5

$2

free

Arizona

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

$5

$5

$5

Arkansas

Victim of ID theft

free

free

free

Senior (65+)

free

$5

free

All other consumers

$5

$5

$5

California

Protected Consumer

$10

n/a

$10

Minor <16

free

n/a

free

Senior (65+)

$5

$5

$5

All other consumers

$10

$10

$10

Colorado

Victim of ID theft

free

free

free

All other consumers

free

$10

$10

Connecticut

Victim of ID theft

free

free

free

Protected Consumer

free

free

free

All other consumers

$10

$10

$10

Delaware

Victim of ID theft

free

free

free

Protected Consumer

free

free

free

Senior (65+)

$5

free

free

All other consumers

$10

free

free

District of Columbia

Victim of ID theft

free

free

free

All other consumers

$10.00

free

free

Florida

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

Senior (65+)

free

$10

free

All other consumers

$10

$10

$10

Georgia

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

Senior (65+)

free

$3

$3

All other consumers

$3

$3

$3

Guam

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

Hawaii

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Idaho

Victim of ID theft

free

free

free

All other consumers

$6

$6

$6

Illinois

Victim of ID theft

free

free

free

Minor < 18

$10

n/a

$10

Senior (65+)

free

$10

free

Active duty military member

free

free

free

All other consumers

$10

$10

$10

Indiana

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

free

free

free

Iowa

Victim of ID theft

free

free

free

All other consumers

$10

$12

$12

Kansas

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Kentucky**

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

Louisiana

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

Senior (62+)

free

free

free

All other consumers

$10

$8

free

Maine

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

free

free

free

Maryland

Victim of ID theft

free

free

free

Minor < 16

$5

n/a

$5

All other consumers

$5

$5

$5

Massachusetts

Victim of ID theft

free

free

free

Protected Consumer

free

free

free

All other consumers

$5

$5

$5

Michigan

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

$10

$10

$10

Minnesota

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Mississippi

Victim of ID theft

$10

free

free

All other consumers

$10

$10

$10

Missouri

Victim of ID theft

free

free

free

All other consumers

$5

$5

free

Montana

Victim of ID theft

free

free

free

All other consumers

$3

$3

free

Nebraska

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

All other consumers

$3

$3

free

Nevada

Victim of ID theft

free

free

free

Senior (65+)

free

free

free

All other consumers

$10

$10

$10

New Hampshire

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

New Jersey

Victim of ID theft

free

$5

$5

All other consumers

free

$5

$5

New Mexico

Victim of ID theft

free

free

free

Senior (65+)

free

free

free

All other consumers

$10

$5

$5

New York

Victim of ID theft

free

free

free

Protected Consumer

free

free

free

All other consumers

free

$5

$5

North Carolina

Victim of ID theft

free

free

free

Spouse of ID Theft Victim

free

free

free

Minor < 16

$5

n/a

$5

Senior (62+)

free

free

free

All other consumers

free

free

free

North Dakota

Victim of ID theft

free

free

free

All other consumers

$5

$5

free

Ohio

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Oklahoma

Victim of ID theft

free

free

free

Senior (65+)

free

$10

free

All other consumers

$10

$10

$10

Oregon

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

All other consumers

$10

$10

$10

Pennsylvania**

Victim of ID theft

free

free

free

Senior (65+)

free

$10

free

All other consumers

$10

$10

free

Puerto Rico

Victim of ID theft

free

free

free

Senior (65+)

free

$10

free

All other consumers

$10

$10

$10

Rhode Island

Victim of ID theft

free

free

free

Senior (65+)

free

free

free

All other consumers

$10

$10

$10

South Carolina

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

free

free

free

South Dakota**

Victim of ID theft

free

free

free

Minor < 16

$5

n/a

$5

All other consumers

$10

$10

$10

Tennessee

Victim of ID theft

free

free

free

Minor < 16

$10

n/a

$10

All other consumers

$7.50

free

$5

Texas

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

$10

$10

$10

Utah

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

All other consumers

$10

$10

free

Vermont

Victim of ID theft

free

free

free

All other consumers

$10

$5

$5

Virgin Islands

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

Virginia

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

$10

free

free

Washington

Victim of ID theft

free

free

free

Senior (65+)

free

free

free

All other consumers

$10

$10

$10

West Virginia

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Wisconsin

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

Medically incapacitated and not an ID theft victim

$10

n/a

$10

All other consumers

$10

free

free

Wyoming

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

Sources: Consumersunion.org Transunion.com NCSL.org

When a credit freeze makes sense — and when it doesn’t

You should freeze your credit report when you are in danger of financial or identity fraud.

Eva Velasquez, of the Identity Theft Resource Center, says consumers should consider freezing their reports if they are victims of identity theft or at an increased risk of having their information misused for identity theft because of lost or stolen items.

Consumers might also consider a credit freeze “if their personal information, specifically their Social Security number, is compromised in some way, like in that of a data breach,” says Velasquez.

Freezing your report is an important consumer protection you can and sometimes should take advantage of as a general consumer. However, there are several occasions when you may not want to freeze your credit.

  • You are planning to open a new line of credit (credit card, mortgage, etc.) in the near future.
  • You work for a company that requires a regular background check or access to your credit report.
  • You regularly open new accounts with financial institutions.

Ultimately, if you are not in danger of ID theft, the decision to freeze or unfreeze your credit report depends on whether or not you’re willing to go through the inconvenience and cost of unfreezing and refreezing each time an entity you approve of wants access to your credit report. If you want a more convenient way to monitor use of your credit report, you may want to consider placement of a credit fraud alert instead of the freeze, as explained below.

Pros and cons of freezing your credit report

Pros:

  • Locks your credit report
    The most obvious benefit you’d get from freezing all of your credit reports is an additional layer of protection. Only you can permit a lender or other entity to receive your full, detailed credit report. You’ll have the opportunity to verify a request’s legitimacy before anyone can obtain your report.
  • No impact on your credit score
    Neither freezing nor thawing your credit report will affect your credit score. Your credit score is impacted by positive or negative activity on your end. Adding protection is considered a neutral action.
  • Generally free for ID theft victims
    If you’re a victim of ID theft, you won’t be required to pay any fees to freeze, thaw or lift a freeze on your credit report in most states. However, you may need to provide additional documentation proving the theft and submit your request in writing.

Cons:

  • Need to plan before opening a credit line
    The added protection comes with the added inconvenience of freezing, or thawing your credit report when you need to apply for credit. This will take just a bit of forethought and may cost you up to $10 each time you thaw your report. You may take several minutes to complete thaw requests for all three bureaus online, which will make it a little more difficult to apply for a credit card in the checkout line. You can manually refreeze your accounts or set your request to automatically do so on a certain date.
  • Fees, unless you’re a victim of ID theft
    Each action — freezing or lifting a freeze — may cost you $3 to $10 in many states. The cost is often tripled, as it’s necessary to freeze or thaw all three of your credit reports if you are unsure which bureau the entity requesting your report will use. The cost may be high for some consumers. Freeze and thaw your reports wisely, and ask the requesting entity which bureau it uses to avoid paying unnecessary fees whenever you can.

An alternative to freezing your credit report

If you don’t think you are in immediate danger of ID theft, you can opt for less-drastic protection and set up a credit fraud alert with all three bureaus instead. When you have the alert set, all lenders attempting to pull your credit history will see a flag on the reports, alerting them to verify your identity before extending credit.

The entity is not required to go through additional verification, but the warning puts it at that entity’s discretion. You will still be able to apply for credit whenever you’d like, and won’t need to remember a PIN to unlock your credit report.

Additionally, fraud alerts are temporary. In most cases, you will be required to renew the alert in 90 days.

The post The Guide to Freezing and Thawing Your Credit Report appeared first on MagnifyMoney.

The Equifax Breach and the Cybersecurity Silver Bullet

acer hack

Some time ago, the popular show Mythbusters wanted to find out if the Lone Ranger was right about silver bullets being better than lead ones. Turns out silver bullets are actually slower and less accurate.

When it comes to cybersecurity, quick-fix silver bullets are also less effective than tried-and-true approaches. The most effective cybersecurity strategies begin with two certainties: mistakes will be made, and breaches like the one that hit Equifax will keep happening.

The 143 million consumers exposed in the Equifax breach provide plenty of evidence that there’s still no effective “silver bullet” when it comes to both chronic and acute threats to our collective cybersecurity.

While the Equifax breach is by no means the largest hack to date (that distinction still belongs to Yahoo), it definitely stands out as the breach with the greatest potential to harm its victims.

The Equifax hackers got the most complete data dossiers possible on millions of people. Those dossiers are worth about $30 on the black market and include Social Security numbers, names, addresses, birth dates, and, in some cases, driver’s license numbers. Additionally, the credit card numbers of 209,000 consumers were lifted.

What can be done with this information? Just about every sort of identity theft imaginable.

Credit lines and credit-worthiness can be destroyed overnight, health care records can be polluted with the information of thieves using your benefits illegally, and it can be nearly impossible to get medications filled in a timely manner. Crimes can even be committed in your name, since the thieves have all they need to create a driver’s license with your information and someone else’s photograph.

No Easy Fix

If there were any easy way to solve the data-breach problem, we’d be seeing fewer newsworthy compromises. But as yet, nothing works.

Take, for instance, biometrics. Fingerprints, retina scans, body weight, and shoe size—they offer a great addition to the various ways we authenticate ourselves to the systems storing our data. But they are not a true fix. If a security patch released by a software provider is not installed, as happened in the Equifax breach, it doesn’t matter how many body parts you scan.

Picture the mailboxes in the lobby of a city dwelling—the individual boxes can be opened with one master key so the letter carrier can slot the mail for all the apartments at the same time. It doesn’t matter how well you protect the key for your one apartment’s mailbox if a thief gets access to the master key. The same goes for individual cyber hygiene in the face of a breach.

One of the most promising solutions was once thought to be tokenization—a system of referents that create an impenetrable security trail—but it suffers from the same issue that was behind the Equifax hack: human beings messing up.

Tokenization systems have to be secured and validated using security best practices. That’s where the fallibility part creeps in. Those best practices still need to be implemented by fallible humans with busy lives who have not been told—and consistently reminded—that they are the only solution to the data breach problem.

Data breaches and the identity-related crimes that flow from them are the third certainty in life—right after death and taxes—because there will always be that fallible human element. Education can help mitigate the risks, but even the savviest populace will make mistakes.

Real Solutions

Senator Elizabeth Warren has set her sights on the three credit reporting bureaus, specifically demanding that they offer credit freezes for free. The looming threat of credit hijacking is made possible by the hoarding of information—the credit reporting bureaus’ daily bread. It seems logical, then, that the bureaus should have to pay for the most common crime that data can lead to: credit fraud.

While new laws are good, education is the only real solution.

For many years now I have been advocating a system called the Three Ms, which are the centerpiece of my book, Swiped: How to Protect Yourself in a World Full of Scammers, Phishers and Identity Thieves.

Practicing the Three Ms continues to be the best way to keep your personally identifiable information from being used in identity-related crimes. 

  1. Minimize your exposure. Don’t click on suspicious or unfamiliar links; don’t authenticate yourself to anyone unless you are in control of the interaction; don’t overshare on social media; be a good steward of your passwords; opt for two-factor authentication whenever it’s offered; safeguard any documents that can be used to hijack your identity; and freeze your credit.
  2. Monitor your accounts. Check your credit reports religiously (you can check your credit report for free on Credit.com); keep track of your credit scores; review major financial accounts daily if possible (better yet, sign up for free transaction alerts from financial services institutions and credit card companies); read the Explanation of Benefits statements you receive from your health insurer; and seriously consider purchasing a sophisticated credit- and identity-monitoring program.
  3. Manage the damage. Make sure you get on top of any incursion into your identity quickly and enroll in a program where professionals help you navigate and resolve identity compromises—oftentimes available for free, or at minimal cost, through insurance companies, financial services institutions, and employers.

The odds of President Trump giving his entire fortune to the NAACP are probably better than the chances that we’ll be experiencing fewer big breaches in the future. An individual’s security protocol is only so useful, but an individual’s actions make all the difference.

Image: istock

The post The Equifax Breach and the Cybersecurity Silver Bullet appeared first on Credit.com.

No, Equifax Is Not Calling You. Watch Out for Scam Phone Calls After the Data Breach

Source: iStock

Less than a week after the Equifax data breach was made public, it seems scammers are already looking for opportunities to prey on concerned consumers.

The Federal Trade Commission posted a scam alert Thursday warning consumers to not give their personal information to anyone who calls and claims to be an Equifax representative. Over the summer, hackers breached the Atlanta-based credit bureau’s database and accessed the personal information of about 143 million consumers, including sensitive information like Social Security numbers.

But Equifax is not calling those affected by the breach, so if you get a phone call from someone saying they represent Equifax and want to verify your account information, the FTC advises you hang up. It’s ironic, in a way, to target victims by posing as a concerned Equifax representative. The company has been criticized widely for its sluggish response to the breach, which occurred sometime between mid-May and July but wasn’t discovered until July 29 and wasn’t announced until more than a month later.

In response to the security failure, the House Committee on Energy and Commerce has demanded Equifax answer several questions about the breach, including why the company put off announcing the breach for so long. Equifax has until Sept. 22 to respond to the committee’s questions, and the committee plans to hold hearings on the breach in September or October.

In a company statement, Equifax CEO Richard Smith said the breach was a “disappointing event.”

“Confronting cybersecurity risks is a daily fight,” he added. “While we’ve made significant investments in data security, we recognize we must do more. And we will.”

In the breach, people’s Social Security numbers, dates of birth, addresses, and other personally identifiable information (PII) were compromised, so it’s understandable you’d be worried and are looking for help.

Here’s what you can do to take control of protecting your identity.

Assume you’re affected

While you can go to Equifax’s website and go through a multistep process to see if your information has been compromised, you can also just assume someone has their hands on your personal information. (It’s also worth noting the Equifax site reportedly isn’t reliable for telling you if you’re affected, and many consumers have reported the site is slow to load or doesn’t load at all.) Even if you weren’t among the 143 million whose personal information was compromised in this breach (and the odds aren’t in your favor), chances are it has been or will be in a breach at a different company or organization. With that in mind, you’ll want to focus on how to detect signs of identity theft and how to respond to them.

Monitor your credit

Equifax responded to the breach by offering free credit and identity monitoring to everyone — not just those affected — for a year through TrustedID Premier. You must go to equifaxsecurity2017.com to enroll, which requires entering your last name and the last six digits of your Social Security number. You’ll then be given an enrollment date, which may be several days after you start the enrollment process, at which point you can return to the site to continue enrollment. You’ll need to set a reminder to continue the process, as Equifax won’t send you a notification when it’s time.

You have many other ways to find out if someone has misused your personal information. Several companies offer free credit scores — Credit Karma, Discover, Capital One, Mint, LendingTree (our parent company), etc. — either to everyone or to their customers. To help you choose, we put together this guide to getting your free credit score. Credit Karma also offers a free credit monitoring service, and Discover cardmembers can sign up for alerts when their Social Security numbers are detected on suspicious websites. You can also pay for credit monitoring services from a number of providers, including the three major credit bureaus Equifax, Experian and TransUnion, as well as credit scoring giant FICO.

Consider a credit freeze

You can also freeze your credit so no one, not even you, can apply for new credit using your information. If you do this, you have to initiate a freeze with each of three major credit bureaus, as well as “thaw” each report when you want to apply for a new credit account. Every time you freeze and thaw your credit you may be charged a fee, which varies by state. This only protects you from credit fraud and does not prevent things like taxpayer identity theft, criminal identity theft, medical identity theft, and insurance identity theft.

On Sept. 15, Equifax announced it is waiving the fee for removing and placing credit freezes on Equifax credit reports through Nov. 21, 2017. Anyone who paid for an Equifax freeze at or after 5 p.m. EDT on Sept. 7 will receive a refund, the company said.

Have a plan for responding to identity theft

One of the best ways you can prepare for identity theft is to detect it early. After that, you need to know how to resolve it. You can do this yourself by filing a police report, disputing fraudulent accounts on your credit reports, and making the phone calls necessary to correct any problems stemming from the fraud. Or you could pay someone to help you with this time-consuming task. Check with your employer to see if they offer identity theft insurance or identity theft resolution services as an employee benefit, and if not, consider paying for it.

We’ve rounded up the best identity theft resolution services here.

More than anything, remain calm as you sort through the fallout of this breach. Focus on making a plan for protecting yourself from and responding to identity theft and making sure you only deal with trustworthy service providers.

The post No, Equifax Is Not Calling You. Watch Out for Scam Phone Calls After the Data Breach appeared first on MagnifyMoney.