As you may be aware, Equifax, one of the 3 major credit reporting agencies recently announced a data breach may have impacted as many as 143 million consumers in the U.S. exposing sensitive information such as names, Social Security numbers, addresses, birth dates, and even credit card numbers. The internet is full of helpful information about this incident, so I'll keep this short. However, there are three things I want you to know:
The Equifax Website Is Unpredictable
In response, Equifax is proposing that you sign up for their TrustedID credit monitoring service. They are giving free service for one year, regardless of whether you've been impacted by the hack.
In return for your last name and last 6 digits of your SSN, it "allegedly" tells you if you've been impacted by the recent breach. Unfortunately, this eligibility website released by Equifax doesn't appear to be perfect. This security editor entered "Test" and "123456" and it told him he may have been impacted and prompted him to enroll in their monitoring service:
I gave it a try, along with a few other random combinations, and got the same result.
Before You Enroll
Keep in mind that TrustedID is an Equifax product. Obviously, the company has already allowed a massive data breach. It's a legitimate concern to wonder if it’s TrustedID service is actually trustworthy?
In addition, the free service only lasts one year. Embedded in the terms and conditions it says, “Your membership subscription may be subject to automatic renewal.” However, you do not have to provide any payment information upfront. The best Equifax can do is pester you with emails begging you to renew after a year, and at that point you can choose either to be removed from their mailing list, or continue your subscription at the going rate.
Here's what I think you should really be doing...
Freeze Your Credit Report
Given how common ID theft and data breaches are nowadays, one could make the case that your credit should always be frozen. Consumer expert Clark Howard likes to equate a credit freeze with putting a lock on your front door and a credit monitoring service with installing an alarm system. With a credit freeze, you are preventing people from impersonating you. It is a preventative measure and one of the easiest ways to protect yourself against identity theft.
With credit monitoring, you get to learn about how someone has broken into your house after the fact. That is, you are notified after someone has already broken into your house and stolen your belongings, etc.
If interested in freezing your credit report, Clark Howard has prepared a great guide to step you through the process.
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Desmond Henry is a fee-only CERTIFIED FINANCIAL PLANNER™ professional and founder of Afflora Financial Life Planning in Topeka, Kansas. He helps the retiring/retired plan their finances and invest their money. CLICK HERE to learn more.