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The big data breach and you

| September 20, 2017
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A few clients have reached out to us recently with questions about the big data breach from Equifax.

If you are a client or prospective client, and have questions about this information or want to brainstorm regarding your specific situation, please call or email us. Much has been written already, so this is not meant as an all in one reference.

I’m not an expert on information security, but as someone who reads a lot about finance, I have some opinions that may be helpful.

In my mind, there are two parts to this:

1)  LOW IMPACT TO YOUR MONEY  but WASTE OF YOUR TIME

If someone opens a credit card in your name and runs up charges, it’s the bank's problem, not yours! 

You will have to spend some time in what I refer to as “1-800 hell” calling around, probably file a police report, and sign some documents. But at the end of the day, you are usually just out time, not money.

There are other risks in this space, but monitoring your credit with an automatic service should keep you fairly in the loop about anything happening on your credit report. There are horror stories of people committing crimes in your name, health insurance fraud, etc. I think it’s rare enough, and hard to prevent so not worth worrying about. The fear factor is exaggerated by the news and credit fraud prevention companies. At the end of the day, your risk is mostly time, not money. 

It’s worth noting that if you are in the market to buy a house or get a car loan etc., you need to stay on top of your credit to avoid a hack interfering with your purchase. It does take time to clean up your credit from fraud. Be careful with those real estate wires, as those have been a popular way to steal, lately, and that one is all on you if you wire to the fraudster. 

Personally, I use creditscore.com which is okay, and it emails me anytime something happens with my credit. Since we aren’t refinancing right now, I’m not paying anything monthly, but they still keep me in the loop of any changes. I’ve signed up for the ironic free credit monitoring from Equifax, but I have yet to get confirmation of my service to use it 5 days later. The high-cost options are fine if they help you sleep better, but I’m not a fan.  

2)  THIS IS THE BIG ONE - CREDIT MONITORING WILL NOT PROTECT YOU FROM THIS

The crooks already probably had your information available to buy on the internet. This is just another massive data breach further opening up the opportunity for people to steal from you. Nothing has really changed.

You still need to be diligent. Many people check their credit card statements each month but don’t watch their investment accounts. You don’t need to go line by line, but if you check the first page of your statements balances, you should see an area that shows all the deposits and withdrawals.

If you see something out of place, let the bank/investment firm know in a timely manner. My understanding is that you are expected to check your statements monthly, and if something was not noticed and a lot of time passes, recovery may be impossible, and you may be on the hook! 

Recently this has happened to some friends, and both times the client and/or the investment custodian caught the fraud. Companies like Schwab and your bank will email or mail you notices to make you aware things have changed on the account in an attempt to stop fraud. You should read these, and if something doesn’t seem right call. Be careful of clicking on emails. They are often fraudulent and designed to steal your information. I’m getting some posing as my bank these days that look very professional.

In conclusion: check what you have monthly including credit cards, bank accounts, and investment accounts so you can report fraud promptly and be reimbursed. If you do not notice it in a timely manner or are negligent (gave account numbers to a lottery scheme fraudster) you could be on the hook for the whole thing.

Please call or email if you have questions, or would like to brainstorm around your own situation.

Thanks for taking a look!

Tom Gartner, MSAPM, CFP® 

This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.

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