As I’m sure you’ve heard by now, Equifax was the victim of a data breach of epic proportions; over 143 million Americans’ personal and financial data were stolen from Equifax’s database.
When dealing with a data breach of this size and nature, it’s extremely important to take action early and often.
I’m not one to sugar coat; the hackers now possess a wealth of information large enough for this to be a problem for years and years to come. Therefore, it’s crucial to know how you may be affected both in the present and future, so you can better monitor your financial and personal life.
1. Identity theft
Probably the most obvious and arguably the most serious, identity theft could mean far worse than financial loss. Cancelling credit cards or switching banks is a hassle, but it takes no time at all, relatively speaking. A five-minute phone call or visit to the bank and bingo-bango – you have a new credit card or bank account number.
Your name, birthday, and Social Security number aren’t going to change, which makes your identity the most vulnerable part of the equation.
Identity thieves can literally become a clone of you, and they can do it now or ten years from now.
What to do – Check your credit report as often as possible, especially now. You will be able to see if any accounts were opened up, loans were taken out, assets were purchased, or most anything else was done in your name. Numbers two through four are all extensions of identity theft.
2. Tax fraud
Someone who has your personal info can file fraudulent tax returns in your name in the attempt to collect refunds for themselves. Tax fraud has become increasingly popular over the last few years, and this breach will only exacerbate the issue.
What to do – Contact the IRS and your resident state’s Department of Revenue now and in January to see if anything has been filed in your name or if any other activity has taken place in your name that you are unaware of. It’s a good idea to make frequent calls to the IRS and your resident state’s Department of Revenue between January and April (specifically January and February), as this is when most fraudulent returns are filed, as well as right after your return is legitimately filed by you or your CPA.
3. Asset theft
With your banking information, hackers could wire money from your account to their account anywhere in the world at a moment’s notice. With other financial accounts (like a brokerage, 401(k), IRA, etc. account), your securities could be sold and the cash transferred out or withdrawn in the same manner as a checking or savings account.
What to do – The best and safest strategy is to transfer all of your assets to new accounts. If that isn’t a plausible option for you, then treat all of your current accounts like newborn children; they need to be constantly monitored and accounted for since something could happen in the blink of an eye. If you reconcile your accounts monthly, do it weekly; if you don’t reconcile your accounts at all, start now. Constant and consistent action is your best friend here.
4. Credit card and other liability fraud
Possibly more dangerous and burdensome than asset theft is liability fraud. If your credit card info falls into the wrong hands, your bill could be run up or card maxed out in a matter of minutes. Although the major credit card companies are usually very responsive and helpful when it comes to removing fraudulent charges, it’s a pain to go through all that.
Not only can your existing credit cards be used, but new accounts could be opened in your name as well. This goes for credit cards, mortgages, loans (personal, business, auto, student, etc.), and any other type of liability. This could sabotage your credit score and make it nearly impossible for you to obtain a loan for yourself.
What to do – Check your credit reports––you guessed it––constantly to see if anything unusual has popped up. I’d recommend checking once a month in the early stages and then at least once a year going forward. You get three free credit report checks a year from each of the three major credit bureaus (yes, Equifax is one of them). Click here to learn more.
5. Medical identity theft
Medical identity theft could technically be lumped with #4, but given the potential impact and recent popularity, it should stand alone. Medical identity theft occurs when someone, who most likely does not have insurance, visits the doctor or hospital under your identity, has a surgery/operation/procedure done, and sticks you with the bill.
Given the cost of medical bills, you can imagine how detrimental this would be to your financial health, not to mention the possibility of an increase in your insurance premium.
What to do – That’s right, check your credit report. You should also contact your insurance provider(s) to see if any activity has occurred on your account. If you’re scheduled for a procedure, you should contact your insurance provider before and after the operation to ensure only the legitimate activity is and will continue to be posted to your account.
How to find out if you were possibly affected and take action
Despite reports of being somewhat unreliable, you can check to see if you were (possibly) affected here.
Equifax is offering a year subscription to their credit monitoring program, TrustedID Premier. This isn’t a bad idea, but this problem will continue to persist after that year is up so, if you’re affected, you should seriously consider other options such as:
- Signing up for free credit monitoring with Credit Karma
- Freezing your credit with the three major credit bureaus to make sure no one but you access to your credit
If you have any questions or would like more info, you know where to find me 👇
Nick Aiola is a CPA located in New York, NY. Nick provides the highest quality of tax and accounting services to a wide range of clients, including individuals, businesses, and fiduciary entities.
Phone – (646) 397-9537
Email – firstname.lastname@example.org
Facebook – Nicholas Aiola, CPA
Twitter – @nicholasaiola
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