The Equifax Breach: How Can You Protect Yourself?
By Michael D'Addio, Principal, Tax & Business Services
The Equifax data breach, which disclosed sensitive personal information of an estimated 140 million individuals, has raised questions concerning what defensive measures should be taken now. The exposed information includes names, social security numbers, dates of birth, home addresses, driver’s license numbers, and credit card numbers.
Actions which should be considered.
1. Determine if your information was exposed. This can be done by logging into www.equifaxsecurity2017.com and entering your last name and the last six digits of your social security number. Since you will be providing sensitive information, you will want to do so from a secure source.
2. Enroll for a free year of credit monitoring and other services from Equifax. The enrollment period will close on November 21, 2017. Initially, there was a concern that the acceptance of this service could cause a forfeiture of a right to sue Equifax. However, the company has updated its terms to provide that enrolling does not prohibit consumers from taking legal action.
3. Check your credit reports periodically. You can request one free credit report from each credit reporting agency (Equifax, Experian and TransUnion) per year. This rule allows you to request a report from a different agency every four months and avoid a fee for the year.
4. Consider placing a credit freeze on your files. This makes it harder for an identity thief to set up a new account, though charges can be made to existing accounts. You will need to place the credit freeze with all three reporting agencies. To obtain new credit in the future, you can temporarily lift the freeze at one or all of the agencies by using the PIN assigned to you at the time of the freeze. It is important to remember the PIN and to secure it. Depending on the state, there may be some fees for placing, removing or temporarily lifting the credit freeze. Equifax has temporarily waived fees for freezes placed before November 21.
5. Create new accounts. Since an identity thief can still make charges to existing accounts even if there is a credit freeze in place, some consideration should be given to closing old accounts and creating new accounts.
6. An alternative to a credit freeze is to place a fraud alert on your credit files. This warns creditors that you may be the victim of identity theft and that they should verify that someone seeking credit in your name is actually you.
7. Never provide sensitive personal information on the phone. For anyone placing a credit freeze or fraud alert on his/her files, there is a concern that a scammer will make contact by telephone, pretending to be one of the credit services seeking to “verify” sensitive information.
8. Change your passwords on all financial accounts to something which is more difficult to hack, and change passwords periodically. While this creates some additional burden on you, the benefits are worth it. Where possible, use two factor authentication.
9. Contact the Internal Revenue Service to request a six digit filing PIN. IRS has a special pilot program which permits an individual to receive a special PIN if the prior year’s tax return was filed with a home address of Florida, Georgia or Washington D.C. For those who reside outside of these areas, there is a question as to whether IRS will issue a special PIN, since this procedure is generally limited to victims of “tax-related identity theft.” The Equifax breach would seem to fall outside of the definition of a “tax-related identity theft.” Some suggest that a Form 14039 Identity Theft Affidavit should be filed with IRS in any case. If the Service rejects the issuance of a special PIN, the account would generally be flagged for suspicious activity and may receive additional monitoring.
10. File your income tax return early in the tax season so that IRS receives it prior to the filing of a false return by an identity thief.
If you have any questions and want to discuss your options further, do not hesitate to contact your Marcum professional.