By Carrie Kerskie, director, Identity Fraud Institute at Hodges University
While we were preparing for Hurricane Irma, another major story was making the rounds on news channels. That was the announcement that Equifax, one of the three major credit reporting agencies, had experienced a data breach. It was reported that the credit file information of 143 million Americans was exposed during the breach, which represents an impact to nearly 50 percent of our country’s population. Regardless of whether you were directly impacted or not, here are answers to some of the most commonly asked questions.
I don’t use Equifax, could my identity information be compromised?
Possibly. Equifax is a credit reporting agency. If you have ever had a credit account, you more than likely have a credit file with Equifax. Credit reporting agencies collect information from numerous sources including creditors. When you apply for a credit card, car loan, or to rent an apartment, the information is reported to one or more of the major credit reporting agencies (also known as bureaus). Your payment history, including late or missed payments, may also be reported. Credit reporting agencies provide creditors, companies that extend credit, a way to determine if you pay your bills or not and if they should approve your credit application. All of this collected information goes into a file known as your credit file. The credit file also contains sensitive information such as your social security number and possibly driver’s license number or credit card number.
If you find a discrepancy on your credit report, you have certain rights to protect yourself and credit history.
How do I know if my information was compromised?
Equifax has a website where individuals can check to see if their information was exposed. Unfortunately, there are conflicting reports on the accuracy of the information provided by the website. It is probably best to assume your information was exposed and take the necessary steps.
How can I protect my bank account?
You should know that federal law, Electronic Funds Transfer Association (EFTA), limits your liability for erroneous transactions in a bank account, including fraudulent transactions. To help ensure protection under this law, regularly monitor your transactions and bank statement. If you detect an unknown transaction, report it to your bank immediately. The law provides you with a period in which to report any discrepancies, typically 30-60 days. However, some banks may have shorter reporting windows. Contact your bank for its specific requirements and if you have any questions. It should be noted that, while the money lost to fraudulent transactions may be replaced by the bank, the bank may not refund overdraft fees. This is one reason credit cards can offer greater protection than debit and/or credit cards. You may want to speak with your bank to understand its policies related to the reimbursement of funds lost due to fraudulent transactions.
Another option is to sign up for online access to your bank account through your financial institution. Online access enables you to monitor your accounts anytime from anywhere. You do not have to wait 30 days to receive your bank statement. The earlier you detect and report the discrepancy, the faster the money may be returned to your account. Many financial institutions also offer online alerts. You can use these alerts to help you monitor for fraudulent transactions. One example of an alert is a balance alert. You determine the amount and, if your account drops below that amount, you will receive a text message or email. These are typically free and were created to help you monitor your account. Remember, it is not the responsibility of the bank to detect fraud; it is up to you to monitor and report it once detected.
How can I protect my credit and credit score?
If you find a discrepancy on your credit report, you have certain rights to protect yourself and credit history. The Fair Credit Reporting Act provides the following:
- Credit reporting agency must promptly investigate disputes.
- You may add a comment to your credit history report.
- The credit reporting agency must correct or delete incorrect or unverified information within 30 days.
- The credit reporting agency must delete negative information more than 7 years old.
This means that if someone were to open a credit account using your identity without your permission, you have the right to dispute that account and have the information corrected. Typically, this means the fraudulent account will be closed and removed from your credit history report.
While not all identity theft can be prevented, a credit freeze is the best defense for protecting your credit report and credit score from “new account” fraud. New Account fraud occurs when someone uses your identity to open a new credit account, such as a credit card or loan. A credit freeze blocks new creditors from seeing the credit report. If the credit report cannot be reviewed, more than likely, the new account will not be established. A credit freeze will not have an impact on your current credit accounts. You may still use them without interruption.
To establish a credit freeze, contact each credit reporting agency directly. The three major ones are Equifax, Experian and TransUnion. Fees may apply. In Florida, the fee to establish a credit freeze is $10 per credit reporting agency. This is a one-time fee, not a monthly or annual fee. If you are over the age of 65 or a documented victim of identity theft, the fee is waived. Equifax has offered to waive the fee for establishing a freeze as well as the fee to temporarily lift the freeze. In the event you need to permit an organization to view your credit report, you simply contact the corresponding credit reporting agency and ask it to temporarily lift the freeze. You will be required to provide your PIN to validate your identity. A PIN will be assigned when you establish your credit freeze.
To place a credit freeze, contact each credit reporting agency at the telephone numbers listed below. It should be noted that the credit reporting agency may try to promote a fraud alert and not a credit freeze. It may also try to promote its fee-based “credit lock” or monitoring services. Neither of these is the same as a credit freeze. If at the end of the conversation you do not have a PIN, then you did not get a credit freeze.
Is a fraud alert the same as a credit freeze?
No, a fraud alert is only in effect for 90 days and then it expires. A freeze is permanent until you remove it. With a fraud alert, creditors still receive your credit report but the report will have a statement, or disclaimer, warning the creditor that there is an increased risk of identity theft and to use caution when issuing new credit. You have the option of providing your telephone number for a potential creditor to call you prior to issuing the new credit. A fraud alert is merely a warning to a potential creditor, not a mechanism to prevent the issuance of new credit. It should be noted that creditors are not required to follow the instructions of a fraud alert. Therefore, a fraudulent credit account could still be opened.
What about credit monitoring services?
Equifax is offering free credit monitoring to victims of the breach. Many of the emails you may have received from your financial institution or other organizations about the Equifax breach were designed to promote their monitoring services. Some important points about credit monitoring follow.
- It does not prevent identity theft.
- It notifies you when there is already a problem.
- Most do not fix the problem for you.
- You may have to restore your identity yourself.
- A few will restore your identity with a signed limited power of attorney.
- You are charged a monthly fee per person.
- The million dollar insurance policy is not your insurance policy, it is the company’s insurance policy.
- There may be exclusions; read the fine print.
- Pre-existing cases, such as a breach, may exclude you from restoration assistance.
Another alternative to consider is identity theft insurance. You may already have identity theft insurance and not know it. Many homeowner’s policies include an identity theft insurance rider policy. Important points about identity theft insurance follow.
- May pay up to the limit of the policy to have a company restore your identity
- May reimburse you for out-of-pocket expenses
- May offer lost-wallet protection
- Premiums could range from $25 to $60 per year
- Policy may cover all members of your household
How do I know which to choose?
Identity theft can happen to anyone at any time. There is no service you can pay for that will protect you from becoming a victim. You need to have a plan in place to assist you should you become a victim. When determining which option is best for you, compare the restoration services. Ask the following questions:
- When I become a victim, who spends the time restoring my identity?
- Do I have to sign a limited power of attorney when I become a victim?
- What is excluded?
- Are there any exemptions?
These should help you bypass all of the marketing hype to make an informed decision.
Should I be concerned about my children?
Possibly. Children can also become victims of identity theft. Parents and guardians in Florida are able to create a credit freeze on behalf of their children. To learn more, visit the Florida Department of Agriculture and Consumer Services website at http://www.freshfromflorida.com/Consumer-Resources/Identity-Theft/Protect-Your-Child-s-Identity
What else should I do?
Request a free copy of your credit report from each credit reporting agency at www.AnnualCreditReport.com. This website was developed by the Federal Trade Commission and the three major credit reporting agencies. By law, you are entitled to receive one free credit report from each credit reporting agency every 12 months. Report any discrepancies to the corresponding credit reporting agency.
The risk of identity theft goes beyond credit scores and bank accounts. The Identity Fraud Institute has provided a tip sheet, which is available online at https://www.hodges.edu/identity/tips.aspx. The best defense is self-monitoring. Monitor your bank and credit card transactions. Monitor what information is available about you online. If anything appears suspicious, take immediate action. Remember, the earlier you detect it, the easier it will be to fix it.
Where to get help?
In the event you do become a victim and need assistance, the Identity Fraud Institute offers free victim assistance. If you need assistance, send an email to firstname.lastname@example.org to schedule an appointment. Please note that currently, these services are being provided by one individual on a limited basis. The Identity Fraud Institute seeks donations or sponsors to expand these services in our area.