As you have probably seen reported across the media, hackers infiltrated prominent credit reporting agency Equifax and stole the private information of over 143 million Americans. While it will be interesting to see how all this came to be, the big question is, “What should those affected do?”
Your first (and best) option is to contact the four major credit agencies and place a credit freeze on each. The cost varies from state to state—if you are in Maryland and not yet a victim of identity theft, this will cost you $5 per agency to place (or to lift) the freeze. A credit freeze is intended to prevent anyone (including you) from opening credit in your name. If you are currently in the process of buying a house, car, or securing a loan otherwise, this will obviously complicate that process. If you are in the midst of having a legitimate credit report pulled, you may have to wait. If you have frozen your credit, you may be required at some point to unfreeze it.
Here are the links to freeze your credit online:
Here is a state by state list of costs involved.
Three states—Kentucky, Pennsylvania, and South Dakota—remove your credit freeze automatically after seven years. The others are permanent.
It is important to note that freezing your credit will not have a negative impact on your credit score. Also, this will not stop pre-approval credit offers—you can stop the pre-approved credit offers by calling 888-5OPTOUT (888-567-8688) or by visiting www.optoutprescreen.com. This will stop the offers that go through the consumer reporting agencies, which is most of them. It’s good for five years, though you have the option to make it permanent.
What Are The Effects Of A Credit Freeze?
Within three business days of receiving your letter, the consumer reporting agencies will place a freeze on providing credit reports to potential creditors. Five business days after placing the freeze on your account, the consumer reporting agencies will send you a confirmation letter containing a unique PIN (personal identification number) or password. Keep this in a safe place.
You can have a security freeze lifted for a temporary period. There is a $5 fee charged in Maryland for temporarily lifting a security freeze, unless you are an ID theft victim. Again, this cost varies state by state.
To unfreeze your account, you’ll need to contact the consumer reporting agencies, provide proper identification, provide your unique PIN or password, and specify during what period your credit report will be accessible. Consumer reporting agencies must lift a freeze no later than three business days from receiving your request by mail, or no more than 15 minutes after receiving your request by secure electronic method or by telephone. Otherwise a new creditor who asks to see your credit will receive a message or a code indicating the file is frozen.
Should You Use A Paid Monitoring Service?
It may make sense to consider paid monitoring services such as Lifelock, EZ Shield, and Identity Guard, IdentityForce, and ID Watchdog. These services are certainly helpful and have merit, particularly if one becomes a victim of identity theft. Of all these, ID Watchdog is the only one that will help if you have already been an ID theft victim. If you are risk averse and inclined to let a service work for you in this regard, they all offer a valid service for between $10 and $27 a month, which includes ID theft insurance. Credit Sesame and CreditKarma are free monitoring services. Civic has a free service and a low cost paid service, however many facets of their protection are still under development.
Consumer Reports suggests a more direct approach by checking your own credit through annualcreditreport.com, signing up for credit and banking alerts, and using credit freezes.
Equifax is offering a year of their “TrustedID” identify protection for free to those affected by the leak, noting that “enrolling in the free credit file monitoring and identity theft protection that we are offering as part of this cybersecurity incident does not waive any rights to take legal action.”
As for your taxes, file as early as possible to prevent someone from filing a bogus return and stealing your refund. And never leave your paper tax returns in your mailbox to be sent to the IRS.
The best approach moving forward is simply to make things harder for the bad guys. Choose reasonable passwords, shred credit card offers, don’t let someone with bad grammar and a bad accent who just phoned you bully you into wiring money. Check your accounts regularly. Sign up for text alerts for your credit cards and bank accounts.
Note that the IRS will never call or email to demand immediate payment using a specific payment method (such as a prepaid debit card, gift card, or wire transfer). Generally, the IRS will first mail you a bill if you owe any taxes. The IRS doesn’t initiate contact with taxpayers by email, text message, or social-media channels to request information. The IRS will not threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying, nor will they demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe. Above all, the IRS will never ask for credit or debit card numbers over the phone.
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