Over 140 Million Americans Hacked
Credit reporting firm Equifax Inc. caused quite a panic last week when it announced that approximately 143 million Americans – almost half of the United States population – may have been compromised by hackers. The company said it discovered the incident on July 29 and acted immediately to halt the intrusion, but it was too late.
The credit-reporting company said hackers stole personal data – including Social Security numbers, names, addresses, credit card numbers, and dates of birth. If your personal information has been compromised you may want to consider a credit-freeze, the “nuclear option of protection,” according to Matt Schulz, senior industry analyst for CreditCards.com
The company had previously offered victims a free year of credit report monitoring, but customers and advocates were quick to remark that this would not actually stop anyone’s identity from being exploited. Hackers would still be able to open new credit cards and go on spending sprees, apply for loans or mortgages, and leave you responsible for the debt and possibly a bad reputation, reports NBC News.
“If there is a breach and you’re concerned about identity theft, credit monitoring is not the most effective measure,” Chi Chi Wu, a lawyer with the National Consumer Law Center told NBC News. “A credit freeze is.”
National law firm Parker Waichman LLP has extensive and successful experience in all types of litigation. Associates at the firm are available to answer questions for individuals seeking information about filing a lawsuit.
A credit freeze, also known as a security freeze, prevents creditors from accessing your credit report according to the Federal Trade Commission. With a credit freeze, lenders and other companies, even you, cannot view your account. It prevents credit, loans and services from being approved in your name without your consent and does not affect your credit score.
The downside is that it will not stop people from accessing existing accounts. It will just prevent people from creating new accounts with your information. But Matt Schulz warns that if someone gets hold of your passwords on your current accounts, a credit freeze will not do anything to keep them out.
Equifax is offering a credit freeze, (they call “Credit Report lock”) for a year with their Trusted ID Premier service, so you will not have to pay for installing the freeze at Equifax. However, Schulz says to completely lock down your credit, you will need to do freezes at all three bureaus: Equifax, Experian, and TransUnion. You will likely have to pay to set them up at the other two bureaus, according to FOX Business.
Although Equifax is offering the service free in wake of the security breach, it normally costs about $30 – about $10 at each bureau to set it up. In addition, you may have to pay to undo it as well, but costs may vary by state.
Schulz advises that as long as you are not planning to apply for any upcoming credit, such as a house mortgage, you can leave a credit freeze on indefinitely. But, overall, a credit freeze is ultimately the best way to keep the doors to your credit closed.
“You never know for sure 100%, but you should assume your data has been compromised either in this breach or in previous breaches,” said Avivah Litan, a security analyst at financial research firm Gartner. “Well over half the population has been breached even before this. There’s a greater than 50% chance that you have been compromised. That’s what you should assume, no matter who tells you what.”
Litan says that although you could, you should not initiate a credit freeze online and that using the phone is far less risky, reports USA TODAY. “The bad guys are going to use this as an opportunity to scam consumers further,” she said.
Since the announcement of the hack and even up to now, there have been problems with the freezes. Equifax customers reported reaching call center employees who did not know what a “credit freeze” was. Others said the automated freezing line was not working. And most interestingly, instead of randomly generated PINs, early PIN codes appeared to be simply the date and time you applied for a PIN. Not very secure, NBC News reports.
“Cyberwar is in large part conducted through data mining and cyber-intelligence,” said Litan. “Enemy nation states build databases of Americans that they then use to get to their targets, for example, a network operator at a power grid, or a defense contractor at a missile defense company.”
Legal Information for Victims of Data Breach in Credit Reporting?
If you or someone you know needs legal assistance regarding a security breach of personal information, Parker Waichman offers free, no-obligation case evaluations. We urge you to contact our lawyers at 1-800-YOURLAWYER (1-800-968-7529).