Equifax Data Breach Settlement

4 Minute Read

As you may have heard, the credit rating agency Equifax has recently offered a settlement to all individuals affected by their much-publicized data breach.

Please find below a complete analysis of how this affects each of you along with some steps to take in helping to prevent identity theft.

What was this breach and what exactly happened?

In July of 2017, Equifax found out the personal information of 147 million people was compromised by hackers.  This information included names, birthdays, social security numbers, credit cards numbers, driver’s license, and passport information.

This security hole was discovered by Equifax in March of 2017, but they did not properly patch this hole to prevent the compromising of consumer information.  Equifax did not disclose this breach for over a month and a half.  In fact, their Chief Intelligence Officer sold all of his stock in the company upon learning of this breach and is currently under SEC investigation for insider trading.

Was my information compromised?

To find out if you were affected, you will need to visit the website:

https://www.equifaxbreachsettlement.com/

From there, you will enter your last name and last 6 digits of your social security number to see if you were affected.  If you were, you could be eligible for the choice of free credit monitoring over 4 years, up to a $125 cash payment, or identify restoration services.

What does it mean to have my personal information compromised?

When your information is stolen, hackers could use this information to open new accounts in your name, file false tax returns, or make real estate purchases.  Once discovered, it could take many hours to prove you didn’t initiate these transactions and fix your credit.

What exactly is Equifax offering?

The choice of:

1. At least four years of free credit monitoring through Equifax, Experian, Transunion, and another six years of free credit monitoring through Equifax along with $1 million of identity theft insurance.
2. Up to a $125 cash payment.
3. If you were a victim of identity theft from this breach, cash payments to compensate you for the time you spent restoring your identity.

Analysis

The cash payment option of $125 is not exactly what it appears.  There is a bucket of only $31 million dollars to pay for those who opt for the cash payment.  If more than 0.2% of the 147 million affected choses the cash payment, that $125 will be reduced proportionately.

If your identity was compromised after the breach in 2017, and you have spent time and money having to restore your identity and credit, you can file a claim of up to $20,000.  You will need proof and detailed records of the money and time spent.

Based on my research, if you haven’t been the victim of identity theft since the breach, the credit monitoring and $1 million of identity theft insurance looks to be the best deal.

Here are some steps you can take to help be proactive in protecting your identity:

• Sign up for some sort of credit monitoring, either through this settlement or a free service such as Credit Karma.  This monitoring will detail any credit inquiries, new accounts, late payments, payment history, and your credit score so you can proactively monitor your credit on an ongoing basis.

 

• Freeze your credit.  By placing a freeze on your credit, no new accounts can be opened in your name because a credit check cannot be done.  You can freeze and unfreeze your credit at any time, and there is no cost to do so.  To do this, you will need to contact all three credit bureaus (Equifax, Experian, and Transunion) where you will receive a special pin that you will use to freeze and unfreeze your credit going forward.

 

• Add text message confirmations to credit card purchases.  This will alert you via text message any time a purchase is made with your credit card.  When a hacker has your credit card number, many times they make test purchases of just a couple of dollars to see if you notice, and then start making big ticket purchases if you do not.

 

• There are also services out there such as LifeLock that offer comprehensive identity theft protection for a monthly cost.  Their $35/month plan offers up to $1 million of reimbursement for stolen funds along with comprehensive ongoing credit monitoring and cybersecurity services.

I think the most important thing with protecting your identity is being proactive and assuming some of your personal information could be out there.  Cyber criminals are only getting more sophisticated, and these data breaches are most likely to continue.

I hope this information was helpful, if you have any questions at all or would like help implementing any of the above suggestions, please don’t hesitate to contact the office as I would be glad to help in any way that I can.

 

Kane Financial is an Investment Adviser registered with the state of New York. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services.  Please contact us at (315) 801-9028 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions.  Our current disclosure brochure, Form ADV Part 2, is available for your review upon request, and on our website.