Last week, I woke up, checked my phone only to see it blowing up with alerts. I was getting alerts about random charges that were not mine from my credit card. Not the best way to wake up, but not surprising since it has been about 6 months since the largest hack in history. Fortunately, I had taken steps to protect myself, have you? There are 3 steps to protect your personal and business data you should take today. This event could be a catastrophe financially if steps are not taken now to protect yourself.
I assume (unless you have been living under a rock) that you have by now heard of the large data breach that occurred at Equifax that compromised information on 143 million Americans. This is not your average data heist! It lasted for 76 days unbeknownst to the company and troves of data was compromised. If you weren’t aware the credit agencies have amassed data on most Americans including social security numbers, employment information, birth dates, spousal information, addresses, cell phones, business information, etc… All of this information that was hacked is sold on the “dark web” to be used by criminals.
The Equifax hack is on top of data breaches at pretty much every other major company from Home Depot to United Airlines. More than likely your data was compromised and is now floating around the “dark web” waiting to be used by an unscrupulous criminal. Fortunately, there are several steps that can mitigate the fallout from the “sale”. But, time is of the essence; if you do not act quickly you are out of luck.
With all the recent data breaches, many of the buyers of your information have been patiently waiting to use it. They have let enough time elapse to allow you to lower your guard. For example, if they stole your credit card information 6 months ago and the card has not been canceled, the card is likely still valid; they will make a couple small “hits” on the card to see if it is valid. For example, in my case, I noticed a $1 transaction and then shortly after another one for $500 after they confirmed it was valid.
What do you need to do today? These are no brainers that will save you’re a** if you were compromised. Here are the three steps to protect your credit?
- Lock down your accounts: This is a simple process. For all your bank, credit card, and other sensitive accounts enable Dual Authentication. This is imperative both for your personal and business accounts. What does this mean? When I log into my bank account, I put in my username and password, it then sends a text message to my cell phone with a random code that is valid for 5 minutes. I have to input this code to “authenticate” my account and finish the login process. Essentially it puts in one additional layer of protection to help thwart a hijacking of your account. This service is free on the vast majority of banks, credit unions, etc… If you bank does not have this technology switch your accounts now!
- Put on alerts: Even though you locked down your accounts it is also important to monitor your accounts. I have alerts on my bank and credit card accounts so if there is any transaction I get an e-mail or text. This will allow me to know instantly if there is suspicious activity.
- Get a copy of your credit report: The three credit agencies must provide you with a free credit report each year (you do not need to sign up for anything to get this report). Review each report to see if there are any suspicious items on the report
- If you own a business: You must enable dual authentication for any wires with two parties having to authenticate a wire. For example, in our case we have an accountant. She can setup a wire, but for the wire to be released, another manager has to also check an authenticate. This is a no brainer to prevent wire fraud.
Over the next few weeks (or sooner) you need to take additional steps. There are many different steps you can take to further protect yourself. Your solution will depend on how “secure” and/or inconvenienced you want to be regarding your personal information. As a lender myself, I’ve seen the effects of identity thefts on credit, seen the fraud alerts, and debated what to do. Here are the options:
- Credit monitoring: In my opinion this is a waste of money. It is a bit laughable that Equifax, who just exposed my data, now wants me to “trust them” to monitor my information that they lost in the first place. I don’t need someone to tell me there is a problem, I would much rather prevent a problem than just spot one after the fact. Credit monitoring is a band aide solution.
- Fraud Alert: You call each of the three credit bureaus (Transunion, Experian, Equifax) and ask that they put a “fraud alert” on the file. This lasts for 90 days and lenders are supposed to verify your identity before extending credit
- Extended Fraud Alert: If you’re information was compromised, you can request each of the credit bureaus put a fraud alert on your account. This is the same as above but lasts for 6 years.
- Credit Freeze: This “freezes” your credit so that a lender is unable to pull your credit that you don’t already have a relationship with (for example your current bank that you have a mortgage with would be able to access your credit). Basically you “lock” your credit with a PIN (personal identification number) for each of the three credit bureaus. You therefore have to “unlock” your credit when needed (for example to get a car loan)
The FTC put out an article: credit freeze or fraud alert which is right for you which goes through the pros and cons of the various options.
What did I do and why? The laws of probability show that there is a 60% chance or greater that I was compromised (remember you have the same odds!) so I knew I had to do something. I debated for a while what the proper solution was. The two finalists for me were either extended fraud alert or credit freeze.
- Extended Fraud Alert:
- Pro: The biggest pro for this option was it didn’t totally lock down my credit. If I wanted to get a new credit card, car, etc… I didn’t have to “unlock” my credit each time which was much more convenient. There was also no cost to setup this option.
- Con: I wonder how much this would actually stop a determined criminal. It is not nearly as secure as a credit freeze since a lender could still pull a credit report
- Credit Freeze:
- Pro: This is the most secure solution. There is a PIN that must be utilized before pulling your credit. In many states this is now free to do.
- Con: Every time you need credit (mortgage, car, new CC, apartment, utility, etc..) you must unfreeze your credit. Each bureau charges around ten dollars each time you unfreeze your credit and it can take a day or so before the lock is taken off. This is definitely an inconvenience for most people, but a tradeoff for security and data protection
After looking at the options, I chose to go with a credit freeze. Although a credit freeze is inconvenient and costs more, I chose the most secure solution. I was not confident that a fraud alert would stop someone from gaining credit in my name. A credit freeze was the only option that locked down my information so that it was exponentially harder for a criminal to exploit.
How can you do the same? It was simple to do a credit freeze. It took me a little over an hour to set it up at the three credit bureaus. Make sure you store your PIN in a safe place since they will be needed to remove the freeze. A well-known consumer advocate in Atlanta did an extensive guide that walks you through the process of freezing your credit and removing the freeze when needed. Note that all the credit bureaus are having capacity issues as they are inundated with requests. Keep trying and eventually you will get it done.
Does it work? I froze my account and my wife’s account. As a lender, we have subscription services to pull credit. Shortly after I put the freeze on my credit, I tried to pull my credit report. I was unable to pull any data due to the freeze. The same outcome would happen to a criminal that has access to your information, the credit report would be frozen thwarting any new accounts or identity theft.
Your actions, or lack thereof, can determine whether you are a victim and how serious the damage is. I was thankful that I locked my credit, implemented dual authentication, and setup alerts. This enabled the breach of my data from Equifax or whomever to be more of an annoyance than a catastrophe. I alerted my credit card company, they reversed the charges and sent me a new card. The steps above will help protect your accounts and mitigate the probability of becoming a victim so that when your data is breached it is not a catastrophe for you.
I need your help!
Don’t worry, I’m not asking you to wire money to your long-lost cousin that is going to give you a million dollars if you just send them your bank account! I do need your help though, please like and share our articles on linkedin, twitter, facebook, and other social media. I would greatly appreciate it.
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, Illinois, and Florida. They are recognized in the industry as the leader in hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all they need is their simple one page application (no upfront fees or other games).