Data Hack Protection

I received an email last week titled “Equifax Data Breach Settlement – You may be eligible for cash, free credit monitoring, and more.” Sounds like classic spam, right? Actually in this case it is not spam. This is a legitimate email, and if you also received this email you should read on for how to handle it.

Over the past few years I have become numb to data hacks. It seems like every month there is a new big data hack, and my information was probably compromised. Capital One, Equifax, Facebook, Yahoo, LinkedIn, Home Depot… The list is growing and growing.

What made the Equifax one especially scary is that they are not like the other companies on the list. I know if I shopped at Home Depot, and I know that all they have of my personal information is my name, address, purchase history, and credit card number. LinkedIn knows my birthday and job history, but not a whole lot more. Facebook knows who my family and friends are, and apparently that I love woodworking videos (they knew that before I even knew it!).

Equifax though is a company that I never signed up for. I never purchased anything, and I never gave them any of my information. They just have it because that’s what they do. They collect information on everyone so they can tell other merchants whether or not you are creditworthy.

September 7, 2017 is the day they told us that they experienced a data breach, and that it probably affected 147 million people. It has taken this long for Equifax and the court to agree on what Equifax owes to us, the victims.

You can decide to be part of the Class Action Lawsuit (the default option), or you can proactively waive that right if you have an especially large claim. If you stay in the Class Action Lawsuit, you can either request free credit monitoring for 4 years, or you can request a $125 payment.

$125 isn’t a lot of money, but it’s something, so I was initially going to claim that option. However, I read that there were so many claims for this that most people would not get anywhere near $125. Equifax even put more money into this bucket! But the bucket gets split by the total number of people claiming it. If you re-read the email it says “The amount you receive may be substantially less than $125, depending on the number of claims that are filed.”

I personally went through the following steps. They may not be the best for you depending on your own situation, but I’m sharing this in case it’s helpful.

Go to https://www.equifaxbreachsettlement.com. Scroll down and click on “Find Out If Your Information Was Impacted.” Enter your last name and the last six digits of your Social Security Number. If your information was compromised you can file a claim on this website.

I chose the credit monitoring option.

I have had lots of clients ask me in the past if they should pay for credit monitoring. I usually tell them no. The question I like to ask is this: “Would you feel safer by locking the doors to your house, or leaving the doors unlocked and having a house alarm that only alarms you a month after someone has broken in?” Silly question right? I would rather stop the break in by locking my doors.

You can financially do that for free by “freezing” your three credit files. I’ll explain how to do that in next week’s blog. Freezing your credit files is like locking the doors to your house.

Although I tell clients not to pay for credit monitoring and the false sense of security it gives you, that is still the option I chose in the Equifax case. The monitoring is free, lasts for 4 years with all three credit bureaus, has the option to continue just Equifax monitoring for another 6 years, and comes with $1 million of identity theft insurance. If I were to purchase just credit monitoring on my own that would typically cost $15-$20 per month. In this case the value of the credit monitoring is much higher than the max cash payment I could receive. I won’t rely on the credit monitoring as my first line of defense, but it doesn’t hurt since it is free to me.

I’m a bit of a pessimist when I think about online security. Instead of worrying about whether or not some hacker has my information, I assume they do, and I take whatever steps I can to protect myself from future theft. A very important part of this is making sure I have unique, complex passwords for each of my online logins.

I’m constantly thinking about ways to better protect my own information and the information of my clients. If you have questions about this breach or anything else in your financial life, give me a call! I’d love to talk.

For more information you can also see Equifax’s FAQ page, or this great post from Laura Adams.