Ep. 041 - The Equifax Data Breach with Credit Expert John Ulzheimer

How many of you were impacted by the recent Equifax data breach? I was, Mark was, and considering 145.5 million other Americans were impacted, I'm going to guess that includes many of you too. Now that the news is out, heads have rolled (CEO Richard Smith has stepped down), Congressional hearings have taken place, where do things stand?

How many of you were impacted by the recent Equifax data breach? I was, Mark was, and considering 145.5 million other Americans were impacted, I’m going to guess that includes many of you too.

Now that the news is out, heads have rolled (CEO Richard Smith has stepped down), Congressional hearings have taken place, where do things stand? More importantly, what should you do? Who should you trust?

In times like these, there’s one go-to person: John Ulzheimer, the foremost authority on anything involving credit scores, credit reports, breaches, etc. John is so good that we did this interview on the phone!

Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. He has served as a credit expert witness in more than 270 cases and has been qualified to testify in both Federal and State court on the topic of consumer credit.

We’re going to get into all the dos and don’ts with John, but so you also have the vitals to reference, here are the main takeaways:

• Contact one (under Federal law, each is obligated to notify the other two) of the three credit bureaus Equifax (800-766-0008), Experian (888-397-3742) and TransUnion (800-680-7289) to put a free fraud alert on your credit report. You should also contact a fourth, lesser known company Innovis. The alert makes it harder for an identity thief to open more accounts in your name, but experts note that alerts usually just slow down the process of criminals opening accounts in your name, they don’t prevent it.
• If someone has used your information to make purchases or open accounts, file a complaint with the Federal Trade Commission and print your Identity Theft Affidavit. Use that to file a police report and create your Identity Theft Report.
• Place a credit-freeze on your credit file, which generally stops all access to your credit report. Unfortunately, you need to contact all the companies to freeze your file. Here are the links: Equifax; Experian; TransUnion and Innovis. Important note about a freeze: If you need to access credit, you have to unfreeze your records, which can take a few days. Some states charge a fee for placing or removing a credit freeze, but it’s free to place or remove a fraud alert.

I’m not trying to freak you out or make you even more paranoid, but the reality of the situation is not if your information will be compromised, but when.

“Better Off” is sponsored by Betterment.

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Anthem Data Breach: How to Guard Against Identity Theft

Anthem, one of America's largest health insurers, has confirmed a massive data breach. Hackers stole as many as 80 million records of customers, as well as of past and current employees. Social security numbers, birthdays and addresses have been compromised, though at this point, no credit card data, bank information or medical history appears to have been accessed. The Anthem breach follows big events at Experian, eBay, JP Morgan Chase, Home Depot, Target, all of which have occurred in the last two years. While there is no single way to protect your coveted identity, but there are plenty of best practices to employ to keep the criminals at bay.

Because it is tax season, let’s start with specific tax-related scams, which the I.R.S has highlighted on its “Dirty Dozen” List of Tax Scams for the 2015-filing season. In addition to electronic hoaxes, where some may unknowingly turn over personal information to criminals; there are also fake calls from fraudsters get unsuspecting taxpayers to fork over money they don't owe. The IRS says that some of the most common scams are those, which are the most personal -- unscrupulous tax practitioners who promise outlandish refunds. If you think you've been scammed by a tax preparer, report it to the Treasury Inspector General Administration and forward any IRS phishing emails to the IRS.

In general, you should refrain from providing businesses with your Social Security Number just because they ask for it. Give it only when required. (Medicare recipients take note: your SSN is printed on your Medicare card, so be careful with it!) Also, don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you know with whom you are dealing. If you have older relatives or friends, encourage them to let you know if they have been contacted by any organization, which offers a very high or “guaranteed” return at “no risk”, requires an urgent response or cash payment or sends email from an unrecognizable address.

Additionally, it is imperative that you review each credit card statement before you pay it -- I know it sounds silly, but many simply pay the bill, potentially missing a fraudulent charge. Finally review your credit report every 12 months at annualcreditreport.com. You want to make sure that nothing fishy has cropped up.

If you think that your identity has been stolen, you should immediately contact one of the three national credit-reporting companies (Equifax 1-800-525-6285, Experian 1-888-397-3742 and TransUnion 1-800-680-7289) to put a free fraud alert on your credit report. The alert makes it harder for an identity thief to open more accounts in your name. The company you call must tell the other companies, so need to call all three. The alert lasts 90 days but you can renew it, and the alert entitles you to a free credit report from each of the three companies.

The next step is to file a complaint with the Federal Trade Commission and print your Identity Theft Affidavit. Use that to file a police report and create your Identity Theft Report. After these initially notifications and filings, you should consider taking a few more steps to prevent further damage. You can place credit-freeze on your credit file, which generally stops all access to your credit report. A less draconian step is to place an extended fraud alert on your file, which permits creditors to get your report as long as they take steps to verify your identity. The availability of a credit freeze depends on state law or a consumer reporting company’s policies; while fraud alerts are federal rights intended for people who believe they are, or who actually have been, identity theft victims. Some states charge a fee for placing or removing a credit freeze, but it’s free to place or remove a fraud alert.

Unfortunately, identity theft is here to stay, so the sooner you familiarize yourself with protections as well as remedies, the better off you will be.