Recently, I had a client send me an email asking some questions about the security of her accounts shortly after the Equifax credit hack was announced that had just taken place from mid-May until mid-July 2017.
My client wanted to know if her money was safe.
She could envision someone calling in with her social security number or her address to the different companies we had placed some of her money with, and getting a check cut out to themselves from her hard-earned nest-egg.
She wanted to know what the companies we do business with everyday like; banks, insurance companies and also investment firms are doing to safeguard our money and our personal information.
I wanted to write this article because I know people are worried they’re more likely to lose what they’ve been working hard to build because of this recent Equifax credit hack.
So, if the Equifax credit hack has you worried, and it probably should, I want to give you my honest opinion about what you should do to protect yourself and keep your money and your personal information safe and sound.
First, Understand This problem IS NOT Going Away Anytime Soon
I’m not talking about this particular Equifax credit hack, I’m talking about the stealing of people’s personal information in general. It’s not stopping, in fact, I believe it’s getting more common.
Personally, I’ve made my share of financial mistakes, but my information has been compromised several times over the past ten years and there’s actually not much I could have done to prevent it. It turns out there are a lot of different ways your personal information can be stolen.
If the Equifax credit hack has affected you, you’re in the same boat with millions of other people, totally not your fault, but I think you already know that.
Let me list off a few things that have happened to my credit over the past 10 years…
I had my debit card information stolen somehow, twice: I have no idea how the card info was taken. No one had my debit card either time, but they were somehow able to electronically duplicate my card both times and take out money from ATM’s and make debit purchases as well.
The first time it happened, someone got a duplicate version of my active debit card and went on an eating and souvenir buying binge at Universal Studios in Orlando, FL with it (I was living in Orlando at the time).
The second time it happened to me, my debit card info was stolen by someone in a completely different state who withdrew several hundred dollars out of my personal bank account at a couple different ATMs before I could figure out what had happened.
My medical insurance provider had a data breach: They wrote me a letter letting me know what had happened and they actually had to pay for a year of credit monitoring for me in case something DID happen.
I was also the victim of a second data breach as well less than two years later. I got a letter from a very well-known state university here in Washington saying that they recently had a theft at their school of a hard drive that apparently had some of my personal information on it.
They were also forced to pay for a free year of credit monitoring for me as well, on the same service I had just using because of the medical insurance data hack.
Funny story, a good friend of mine was a victim of that same breach, he showed me the same exact letter he had received a couple days after I got mine.
I also had a fraudulent credit card opened up in my name in a completely different state that was very quickly used to make close to a thousand dollars’ worth of purchases at a Walmart.
Here’s my point in telling you about all the times I’ve had my info stolen…
It happens a lot. I think true, absolute security when it comes to your information and personal data is VERY hard to come by.
But I have some good news…
You can protect yourself. And you don’t need to wait until your information is stolen before you take the steps necessary to start.
Here’s what I would do first…
Monitor Your Accounts, All of them
This is definitely the best place to start. If you haven’t already, sign up for an online account at EVERY financial institution you use. Also, if possible, try to have access to the account on your smartphone (if you use one) so you can instantly access your account values and activity anytime.
I recommend checking the balance and activity at least every two weeks (sometimes even more) of EVERY account you own, whether it’s a bank account, an investment account, or a credit card.
I have alerts on all my bank accounts that get sent to me on my phone anytime a purchase larger than a dollar goes through. My bank also sends me alerts every time money comes into my accounts as well. This is easy to set up and it helps you keep on top of your spending and know when charges hit your accounts.
Take a Second Look at Your Spending
Categorize your spending. Do what you need to do to get it tracked. It doesn’t matter if you do this on a spreadsheet, a sheet of paper or on some budgeting or expense tracking software on your computer or phone.
I think this it’s extremely important to track your spending every month, it allows you to go back through your spending for the past month and look at each transaction you made.
If something seems wrong, or if you feel like you didn’t make a particular purchase, this is a great way to drastically improve your chances of catching fraud in your accounts quickly.
If you’re able to team up tracking your spending at the end of the month with monitoring the activity in real time on your online banking, you’re creating a great two-pronged approach to proactively identifying and stopping fraud in its tracks when it comes to your money.
In Regards to Your Investment Accounts
Personally, I’m more concerned about my banking and credit info getting leaked that I am about someone stealing money from any of my investment accounts.
Banks and other financial institutions are very heavily regulated and are forced to go through multiple layers of protection in order to safeguard your money.
This includes things like; 2 or 3 step verification questions when you call to request money being taken out, email (and regular mail) confirmations being sent to the address on record if any funds are taken out, and also holding periods to verify new bank info (if supplied in conjunction with a withdrawal).
Financial institutions are in the business of keeping personal information safe because the financial consequences of a data breach can be devastating to them.
If a breach happens, a financial institution is required to notify their clients and may also face legal action from those whose data was breached. In both cases my info was stolen, the companies responsible for safeguarding that info had to pay for credit monitoring which can cost hundreds per year. If they’re forced to pay those types of expenses on a large scale, it can be crippling to them financially.
Now, I’m not sure exactly what caused this particular Equifax credit hack, and I doubt we will ever know exactly how all of this took place but there have been several lawsuits already filed claiming that Equifax was negligent in the steps they took (or should have but didn’t take) in regards to protecting the credit information of millions of people. That they had neglected to properly prepare themselves for a data breach of this magnitude.
There’s also that interesting detail about some of their top executives unloading millions worth of stock before the Equifax data hack was announced.
Again, who knows how this will all iron out, but it doesn’t look good for Equifax.
Luckily, if your information was stolen, it doesn’t mean that your financial institutions were hacked. Your financial institutions don’t supply account information to the credit reporting agencies like Equifax, so the only way someone could actually know what accounts you had is if they got their hands on your account info by other means. So invest in a good paper-shredder.
Secure Your Computer
It’s important to run some kind of antivirus and anti-malware monitoring software on your computer. There are thousands of ways you can protect yourself online.
I think it’s a smart move because this is something you CAN control to a certain extent. If you go through the necessary means of protecting your own info online, that’s just one less thing you have to worry about later on. It’s relatively inexpensive to get good quality anti-virus protection.
Equifax Credit Hack, Forget Credit Reports, Monitor Your Credit in Real-time
Credit reports monitor your credit, but credit monitoring in real-time is even better because it will alert you if anything fishy is going on right away.
Use Credit Karma.
Seriously, use it. They’re NOT paying me to write this, I promise.
I absolutely love what Credit Karma does because I think everyone needs to have a real-time look at what’s going on in their credit at all times.
I also love what Credit Karma does because it’s free. Here’s a quick story about why I love their service…
The time that I had a fraudulent credit card opened up in my name, I was actually enrolled in the credit monitoring service that was being provided to me because of the data breach at my previous health insurance company.
One day, I got an alert from the credit monitoring service saying that there had been a hard credit inquiry on my credit that same day.
A hard credit inquiry means a lender is looking into your credit in order to make a decision about whether or not to lend to you.
The inquiry was from a bank, it seemed odd because I hadn’t applied for any credit cards recently and so I decided to wait and see what would happen.
The very next day I received another alert from my credit monitoring service saying I had a brand new credit card opened up in my name at a Walmart in Florida (I live in the Seattle area now).
I knew right away that this wasn’t me, so I called the bank that had issued the card and let them know it was fraud and closed the account down immediately.
It was because of those alerts that I was able to see in real-time exactly what was happening in my credit, and that’s the reason I was able to reverse the fraud quickly.
Here’s the point about Credit Karma, I’ve been using their service for years and I had it at the time of this incident also. Credit Karma sent me the exact same alerts (for free) as the paid service I was being provided because of my health insurance data breach.
I think it’s funny that all these credit monitoring services charge money for something that’s offered on the open market for free.
The only difference between Credit Karma’s free service and the paid service I was provided is that the paid credit monitoring service placed an alert on my credit through one of the credit bureaus (the service was offered through that very same one). They told me to call the other two credit bureaus and also place an alert with them as well.
The also sent me three letters (via email) that I had to print out, sign and send to the two other credit bureaus as well stating that I was a victim of identity theft myself in order to dispute the charges. This was pretty helpful but the letters were very short and to the point. See below for a sample format in case you need to write one yourself.
What to do if You’re a Victim of Identity Theft (or if you’re afraid you’re going to be one)
The first thing you should do if you feel there’s some fraud on your credit is call the company where the fraud has taken place and inform them of that fraud. They may also require you to put that in writing, do it quickly if they ask for it, you want to get this resolved ASAP.
If you’re afraid your info was stolen or that you could be at risk of fraud. I would definitely place alerts on your credit as well.
This will make it harder for someone to open up a fraudulent account by requiring an added verification step for you in the credit application process like having to verify your identity with the lender you’re applying for credit at by phone prior to getting approved.
You can add a credit alert on your credit files on the following websites- you’ll want to do all three;
If you’re afraid something fraudulent has taken place on your credit then you can also look at your credit reports on Credit Karma or on AnnualCreditReport.com, but a good monitoring service like Credit Karma will definitely help you stay on top of everything just as well in my opinion.
If you still feel at risk after monitoring your credit or placing alerts on your credit then consider freezing or locking your credit instead. There are several credit freezing services out there.
I’ve been told LifeLock works great, but it’s not free and it will completely lock down your credit, meaning no one can get any credit on your credit file (including you) without you unlocking LifeLock first. That can be a pain in the rear, but security isn’t always convenient or painless!
3 Secrets The Financial Industry Doesn’t Want You to Know About Are Keeping People Broke and Struggling With Money.
I want to show you what’s holding most people back and exactly what to do if you want to start winning with money…
Here’s a Simple Format You Can Use to Write a Dispute Letter to a Credit Bureau
Do this if you find a fraudulent account on your credit, use this format to write a letter to all three credit bureaus if you ever need to dispute an item on your credit.
-Name and address of credit bureau you’re writing to
-To Whom It May Concern,
-Tell them what happened, you could say: “I am a victim of identity theft. The fraudulent information listed below is showing up on my credit file but it is not mine. I am officially disputing the fraudulent information and wish to request an immediate investigation into this incident. Please remove the fraudulent information immediately from my credit file.”
-List the account name and account number with any other info you have to identify the account you’re disputing
-Request an updated copy of your credit report once the fraudulent account has been removed to be sent out to you.
-Sign the Letter
-Provide your date of birth, address, and your social security number
As you can see, it’s not hard to throw together a dispute letter, and now that I know exactly how to do it (which I’ve just shown you as well) it’s something that I could easily do again without the assistance of a credit monitoring service.
I love Credit Karma because they don’t charge for the monitoring I need to stay on top of my credit.
In fact, I’m 100% confident that when my free year I’m currently on with my other credit monitoring service is up, that I’ll be able to do EVERYTHING I need to keep my identity squeaky clean and tackle any fraud on my credit quickly and easily with Credit Karma by itself. So I’ll drop the other service and save myself around $100 in fees I would have to pay to keep the service.
It Pays to Have a Plan
I think one of the main reasons people are so scared of their credit being compromised is that they have NO CLUE what to do if it happens to them. They hear stories of people having their lives completely ruined by credit fraud and identity theft.
You’re right to be afraid, but you DON’T have to live in fear of the worst if you’re doing your best to protect yourself from fraud by staying on top of all of your financial accounts and monitoring your credit in real time. Now you know how.
Are you brave enough to tell your credit horror story? Tell us what happened to you in the comments below and what you did to fix it…
Good Planning, Good Saving, and Good Investing!