As a fraud expert, I recall a certain fraud conference I attended years ago with a presentation by one of the U.S. Attorney’s Offices in New York. The conference was hosted by the Int. Assoc. of Financial Crimes Investigators (IAFCI), an association for whom I now co-chair the Cyber Fraud Industry Group. The U.S. Attorney’s Office began their presentation with background music of Who Are You by The Who – the theme song of the original CSI TV series. They played this while running through a slide show of articles about identity theft which were endless. The salient point was that identity theft was already out of control at that time.
This memory is pertinent to discussions today about the Equifax breach and questions I’m getting from, seemingly, all directions. Most people are asking “what should I do?” Everyone from family members to clients are asking.
The issue has a long history and probably begins with the practice of entities using SSNs as a unique identifier for individuals. The SSN itself was only meant to be used for social security and I’ve heard that it’s actually illegal to use it for other purposes. However, I think you’ll agree that many entities still use it for identity purposes – both private and public sectors.
On top of this, the credit rating industry in the U.S. has private entities (credit reporting agencies) that make money by purchasing your payment history from creditors, creating profiles, and then selling a credit score to potential new creditors so that they can determine their risk. They also maintain consumer personal identifiers within the profiles that can be used to positively identify credit applicants. This is something U.S. financial institutions are required to do to help combat money laundering and other crimes. What could possibly go wrong with entities storing this sensitive information?
Another issue the financial services industry is struggling with are synthetic identities. These are identities that are completely false, but nevertheless, criminals are able to establish credit profiles at credit reporting agencies with the false identifiers and apply for credit under them.
Where does it end? That’s a good question. If I ask “Who are you?” giving me your first name may be enough if I know you. However, if I’m a financial institution and you’re applying for a loan or a credit card, I have to rely primarily on the credit profile as your “identity.”
This is where we turn back to the Equifax breach in which, at the time of this writing, was the compromise of approximately 143 million consumer profiles (about half the population of the U.S.) and 209,000 credit card numbers.
The compromised information can be used to open financial accounts such as credit cards, loans, lines of credit, etc. It could be used to file a false income tax return on your behalf in order to get an income tax refund. It can also be used for non-financial services related ID theft.
There are plenty of good resources for information on what to do now. One is the Financial Services Information Sharing & Analysis Center (FS-ISAC) and the Federal Trade Commission (FTC). These resources provide information that you can use to determine your personal best course of action that may be based on characteristics such as your age, your personal credit needs such as whether you need instant credit, or other parameters.
They also provide the links to complete any actions you may wish to complete such as checking to see if your information is known to have been included in the Equifax data compromise, signing up for credit monitoring, placing a freeze on your credit reports, placing a fraud alert on your credit reports, or taking other action.
Some actions you can take to be defensive against identity theft over the long term include:
• Filing your income tax return as soon as possible each year so that criminals can’t file a false one using your SSN
• Reviewing your credit reports each year free of cost (annualcreditreport.com). You can also run queries on the SSNs of your underage children to ensure that they come back blank or not on file. If they come back with accounts, you will want to investigate further and file consumer disputes on their behalf if necessary. This can be particularly important in the time period before your child graduates high school as they may be applying for student or other types of loans which is a bad time to find out they were the victims of identity theft with ruined credit.
• Utilizing credit monitoring services. There are some free services to do this such as certain credit card accounts that offer this as an included service, ¹Credit Karma, credit monitoring services offered by entities after they have been breached (Equifax is offering this), etc.
The Equifax data compromise was a large one, but they are certainly not the only one. Also remember that your information is on file with the federal government – several departments of which have experienced their own data compromises. The point being that you should assume your identity information is at risk and you should act accordingly over the long term while helping your children and older generations do the same. At the end of the day, if your credit becomes damaged from a fraudulent entry, you can file a dispute with the credit agency or agencies. Federal law requires the agencies to then take certain actions to verify with the reporting creditor or correct or remove the entry which should improve your credit rating situation.
So…who are you?
¹Wind River Financial does not endorse or promote any particular service. Those mentioned are for example purposes.