Advice for Savvy Retirement Planning

Equifax Data Breach

Equifax Data BreachI have had quite a few inquiries from clients regarding the most recent Equifax Data Breach. For those that haven’t been paying too much attention, last week, Equifax Inc. announced “a cybersecurity incident potentially impacting approximately 143 million U.S. consumers. Criminals exploited a U.S. website application vulnerability to gain access to certain files. Based on the company’s investigation, the unauthorized access occurred from mid-May through July 2017.”

What this essentially means is that criminals captured the private credit files of over 100 million U.S. consumers. Based on what I have read, the information contained names, addresses, social security numbers, dates of birth, and in some cases, driver’s license numbers. While Equifax is not currently aware of any illegal use of that data, they are aware of who’s data was stolen.

What You Should Do Right Now

Equifax has set up a dedicated website that you can go to and, with some identifying information, determine if your personal data was included in the data breach. I highly recommend everyone do this. The website: https://www.equifaxsecurity2017.com/ . Scroll to the bottom of the page and click on the “Enroll” button.

If it is determined that your data was included in the breach, Equifax will offer to enroll you in a credit file monitoring and identify theft protection program, at no charge. I strongly encourage everyone to do this, sooner rather than later.

However, I will tell you from personal experience that I have tried to do this, and I have still not received my confirmation e-mail to complete enrollment and activate product. This could be because their site is inundated with requests, or it could also be that their e-mail was somehow captured as SPAM (although I have not found anything in SPAM folders).

Should I Freeze My Credit?

A credit freeze is a much more robust response to credit concerns. It requires you to directly contact each of the three major credit reporting agencies (Equifax, TransUnion, and Experian – although Equifax will freeze your credit at the same site as above if requested). Freezing your credit basically means that no credit issuer (ie. credit card company, lender, etc.) can pull your credit file. Without pulling credit, no lender will issue you new credit.

The Benefit of Credit Freeze

The clear benefit is that it would be extremely difficult for anyone to open new credit in your name. Since lenders would not be able to pull a credit report, they would not issue any new credit in your name.

The Downside to a Credit Freeze

While having your credit frozen can give you great piece of mind and protection, it is not without a price. First, there is generally a fee involved with requesting a credit freeze at each agency (anywhere from $0 to $30). Second, it means that you cannot make any modifications to your credit, including requests for new credit, without the freeze being lifted. This would require you to call each agency, pay a fee, and unfreeze your credit temporarily.

The decision of whether to freeze your credit thus becomes a personal choice, based on your circumstances.

More Common Types of Identity Theft

While credit monitoring and a credit freeze will only help protect against new accounts being opened in your name, the more common cause of credit abuse is the fraudulent use (or attempted use) of your current credit cards or bank accounts.

There are numerous ways that criminals can obtain access and use of your personal accounts, and some of these ways are virtually impossible to avoid or prevent. For example, employees of retail establishments (ie. restaurant, store, hotel, gas station, etc.) have very easy access to your credit (or debit) cards when you use them.

For this reason, monitoring the activity in your bank and credit card accounts on a regular basis is very important (daily or weekly, but no less frequently than monthly).  As soon as you see transactions that you don’t recognize, you want to immediately investigate and/or report them to your bank or credit card company. Do not wait! Time is of the essence when identifying potential fraud. Most banks and credit issuers will cancel your cards and reverse fraudulent charges if reported in a timely manner.

About Robert Henderson and Lansdowne Wealth Management

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

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