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Equifax Breach and Recommendations

I hate doing the mid-week email as it usually means I have to cover a topic of urgency.  I don’t know many of us, besides ER docs, who likes urgency.  One of the last ones was Brexit and this one is Equifax.

Now, I am not going to get into the breach itself or how some of the top Equifax execs apparently sold off unscheduled stock after they learned of the breach and before it was made public…allegedly.  Instead, I wanted to hit a few quick highlights and recommendations on what you should be doing during what many experts are calling the worst cybersecurity breach yet.  Great☹

  • As some background, it is estimated the personal information for 143 million US consumers was breached. This is roughly 2/3 of Americans with credit reports.  The information hackers had access to included consumer’s names, Social Security numbers, dates of birth, addresses.  For some people it also included credit card numbers as well as driver’s license numbers.
  • Unfortunately, this means the majority of us are exposed to potential identity fraud and theft as our information can be sold to criminals. Uses could include opening up credit cards, loans, make purchases or even drain your bank accounts.
  • There has been an offer from Equifax to use their credit monitoring software and identity theft protection. Really?  Now I am supposed to trust you?  Not a desirable option in my mind especially because eventually their “free” offer will expire and if you continue the service you will start paying.  Yes, Equifax could actually make money off this mistake.
  • The strongest recommendations I am reading about are to do a credit freeze. A credit freeze is basically where you freeze your credit reports and only you, because you have a PIN, can thaw access to your credit reports in cases where there really is a need to access the report.  This means criminals who bought your information cannot access your credit reports when trying to open credit accounts.
  • Credit freezes do not impact open credit cards.
  • There is a cost to do a credit freeze and I understand Equifax has just said they would waive all freeze fees for the next 30-days. This decision was due to consumer pressure as they were going to charge after they are the ones who couldn’t do their jobs.
  • Costs range from $3 to $10 per credit bureau plus any applicable state fees. I know one person who said it cost $60 to freeze their credit.
  • Most states will leave your credit frozen until you turn it off, except for PA, KY, SD and NE. If you live here you will want to check your frozen accounts annually.

Here is a link to a great article that was a tremendous resource for me.  http://clark.com/personal-finance-credit/credit-freeze-and-thaw-guide/

I hate to be the bearer of bad news here, but I would recommend keeping an eye on your credit as it is apparent companies like Equifax are not up to the task. You may also want to give some consideration to freezing your credit, especially if you do not have a need to access your credit regularly.  Finally, because this is a big deal and I am getting questions from clients on it, do not be shy in passing along this information to family, friends and coworkers.

About Dan Johnson, CFP

I am the President and CCO of Forward Thinking Wealth Management, LLC, which is the flat-fee financial planning firm located in Akron, OH, and set up to work virtually with clients across the country. I charge clients a flat fee of $4,800 regardless of asset size. My firm is a solution to what I feel is a broken system where clients pay advisors based on something out of their control - the performance of the market.
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