Risk Management

The Equifax Data Hack: To lock or Freeze your File?

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Updated September 20, 2018

The recent revelation of a massive data breach at Equifax potentially affecting 143 million consumers brought back memories of my own 2001credit fraud experience in Boston; it was an unnerving and horrific experience. Upon hearing the news of this most recent breach, I immediately checked out the link at Equifax.com and learned that, unfortunately, my credit file was among those compromised.

In light of the shocking news of the Equifax data hack and having been a victim of ID theft in the past, I thought I would share some “do’s and don'ts" to help calm your concerns and provide clarity on the differences between a credit freeze, credit lock, and fraud alert.


Do this first: Go to the official link being provided by Equifax

www.equifaxsecurity2017.com.

Type this address into your browser yourself. Click on:
1. "Read" button, 
2. "Enroll" button, and,
3. "Begin Enrollment" button.

You will be prompted to type in your last name and the last six digits of your Social Security Number (SSN). The next screen will inform you if your personal information has been compromised. Even if Equifax says your file wasn't compromised, assume it was and take the necessary steps to protect yourself.

Equifax is offering free identity theft protection and credit file monitoring to all U.S. consumers for one year only. The offering is called "TrustedID Premier" and includes a lock (not freeze) on your credit file.


Credit Freeze, Credit Lock or Fraud Alert?

Equifax has revised its botched response to their data breach since last week and is now waiving the typical "freeze" fee if you act before November 21. Even if you miss the deadline, many states allow you to add or lift a freeze, (not “lock") for free as long as you're a victim of ID theft. Given Equifax’s numerous missteps since announcing the breach on September 7, waiving fees to freeze your credit file is the least management can do.

While a credit freeze and credit lock have similarities, the difference between the two is highlighted below:

  • Credit freeze: Locks your credit file to creditors and should prevent bad people from taking out loans and opening credit card accounts in your name. A security freeze remains on your credit file until you remove it. While a freeze may be the best option to guard against fraud, it may involve fees to add or lift it from your account — the cost of which varies by state but generally costs between $5 - $10. credit-freeze-information-by-state. (*see footnote: New legislation allows consumers to lift or add a freeze without charge as of May 24, 2018).

    If you're applying for credit, you will also need to plan in advance and notify a credit bureau to lift your freeze. It takes about 3 days for your freeze to thaw. Equifax and Experian have a link in their footers to add a security freeze under the heading “Support.” Type this link in you browser to add a security freeze to your TransUnion credit file: https://www.transunion.com/credit-freeze.

  • Credit lock: Locking your account prevents unauthorized credit activity and puts you in control with no waiting, no PIN to remember, and no additional paperwork. You can unlock your credit report at any time with ease. TransUnion makes it easy to find their credit report lock on their home page under a big, blue button. Type this link into your browser to compare Experian's offerings: https://www.experian.com/consumer-products/compare-to-lifelock.html

  • Fraud alert: When placed on your credit file, an alert merely cautions creditors that your information may have been stolen. But many creditors don't even check this; it’s also temporary.

The breach at Equifax has led many experts to recommend that consumers lock their credit reports. The three credit bureaus may also encourage you to "lock" instead of “freeze” your credit file. Why? Because it's easier and credit freezes are regulated by law while locks aren't; no waiver terms or binding arbitration can be imposed on consumers who request a credit report freeze. Plus, if your credit file is frozen, the bureaus can’t sell your information to creditors and other companies for marketing purposes.

Do keep this in mind: The breach at Equifax is severe, and criminals will be able to use the information they've obtained five years from now and beyond — one year of protection being offered through Equifax's Trusted ID Premier is a start, but it isn't enough. Also, Equifax does not notify other national consumer credit reporting agencies of your request to lock or freeze your credit report. You will need to contact them separately to add a lock or freeze to your file.
 

Now for Some Don'ts

  • Don’t click online ads or links you see in news stories related to the Equifax hack; always re-type a link into your browser. There are links being circulated by data theft rings. Beware of phishing and malicious links. Urgent-sounding, legitimate-looking emails are intended to tempt you to accidentally disclose personal information or install malware. Don’t open links or attachments from unknown sources. Enter the web address in your browser. The only links you should click on are on the Equifax.com, TransUnion.com, or Experian.com websites.

  • Don’t provide information to companies that send you emails or call you on the phone. Fraudsters move quickly and never miss an opportunity to take advantage of a crisis like the historic Equifax data breach. They may try to fool you because they will know your Social Security number and other personal information. Remember, your bank, personal financial advisor, and credit card companies do not need to contact you to confirm personal information or ask you for money – they already have it.

  • Don't worry about changing your investment, checking, or savings account numbers. These numbers are not in your credit files. It's also not necessary to cancel your credit card accounts. However, you still need to regularly monitor your bank and credit card accounts just in case thieves use your stolen information to impersonate you and gain access to your accounts.

  • Don’t leave bill payment envelopes in your mailbox with the flag up for pick up. Promptly remove incoming mail to guard against theft. And, do not drop off bill payment envelopes in the big blue USPS mailboxes after pickup hours - fraudsters can monitor your patterns and “fish out” your mail with rodent glue traps.

  • Don't believe that if you freeze or lock your account, you can now relax. The overwhelming majority of fraud involves existing accounts, not new ones.

More on best practices

Cybercrime and fraud are constant threats in today’s digital, age and vigilance is key. Since being a victim of credit fraud in 2001, I regularly monitor my personal and business credit card accounts, bank accounts, and credit report. I've set up alerts on my checking and credit card accounts, so anytime there's activity over a certain dollar amount, I'm notified.

I encourage you to follow the best practices highlighted in this post and apply caution when sharing information or executing transactions. It will make a big difference in protecting your financial information and give you peace of mind.

Visit these sites for more information and best practices:

For a free copy of your annual credit report, only go to:

www.annualcreditreport.com

Call: 877-322-8228

Send a request via certified mail: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Georgia 30348-5281.

Equifax dedicated call center: 866-447-7559, every day (including weekends) from 7:00 a.m. – 1:00 a.m. Eastern Time.


Footnote:

*On May 24, 2018, President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act. The new legislation will allow consumers to “freeze” their credit files at the three major credit reporting bureaus — Equifax, Experian and TransUnion — without charge. Consumers can also lift a security freeze temporarily or permanently, without a fee.


Disclosure:
The information contained in this piece is intended for information only, and should not be considered financial planning advice. The information and opinions expressed herein are obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by Cambridge Wealth Management, LLC. Opinions expressed are current as of the date of this publication and are subject to change. Certain statements contained within are forward-looking statements including, but not limited to, predictions or indications of future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties.

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