Big Data Breaches Give Credit Monitoring Services a Boost 48
Hugh Pickens DOT Com (2995471) writes "As attacks like the one on Target have exposed up to 40 million customer payment card accounts and the names, addresses and email addresses of as many as 70 million shoppers, Tiffany Hsu and E. Scott Reckard report in the LA Times that increased activity by data hackers has produced millions of victims but there has been one big winner: credit monitoring businesses. "It's almost a terrible thing to say, but these kinds of situations raise awareness of the need to protect yourself and to be more vigilant in checking your transactions," says Yaron Samid. Meanwhile services with names such as BillGuard and Identity Guard report a surge in sign-ups from people anxious to be protected. For example, the number of AAA Southern California members opting in for the club's identity theft monitoring service — whether for free or for an extra charge — boomed in January, up 58% from December." (More below.)
"I have to believe part of it was these different data breaches that have been occurring, people being concerned about that," says Jeffrey Spring. The BillGuard credit monitoring application, launched in July, uses crowd-sourced reporting from its members to issue alerts about possible payment card security concerns. Since the Target breach, the app's user base has ballooned by nearly half a million participants and identified $1 million in fraud. "We have built a crowd-source system of identifying fraud on debit or credit cards," says Samid. "The system will ask others if this charge is OK or not OK, and if system see a few people saying this is not an unauthorized charge, we alert others that it is potentially fraudulent. The more people that join the network, the more effective it gets." Card issuers and transaction processors have spent hundreds of millions of dollars dealing with electronic fraud in the last three years says Michael Moebs and consumers can soon expect increased annual fees to recoup the costs. "The view is data breaches and hacking have become a way of life, and the industry must get used to it.""
Freeze Your Credit (Score:5, Informative)
I was a victim of identity theft. Someone obtained my name, address, date of birth, and social security number and opened up a credit card in my name. (Apparently, Capital One doesn't care if you get Mother's Maiden Name wrong. So much for that being a "security question!") My only saving grace was that the criminals paid for rush delivery of the card and THEN changed the address. The card got sent out before the change of address was processed and it came to me instead of to them. Otherwise, I would have found out when the collection agencies banged on my door demanding I pay the thousands of dollars that I would have "owed."
Unfortunately, the thieves weren't caught. The local police were woefully undertrained on technology. (They had an IP address of the web form filled out and the time submitted and I needed to show them how to find the ISP and what the next step should be.) They also weren't highly motivated. After all, I didn't lose any money and chances are they would do some legwork and then the case would need to be transferred to some agency out of state. The feds were completely uninterested as this was too small-time to warrant their attention.
Even if the thieves had been arrested, though, who knows how many other people have my information. I did research on how to keep this from happening again and turned up three things:
1) The Fraud Alerts are garbage. They are a voluntary note on your credit that credit issuers are supposed to check but sometimes don't. Plus, they only last 90 days. Once your information is out there, it's out there for good. Thieves aren't going to delete it after 90 days, why should the fraud alert end there.
2) You can freeze your credit. It can be a pain because you'll need to pay to thaw it if you want to get a loan/credit card/etc, but it means that no thief can add a line of credit in your name. Period. Of course, credit agencies hate it when you freeze your credit since this means you won't be opening tons of store cards and the like which means they can't make money off of you by selling your name to those "you've been pre-approved!" card issuers. To a consumer, though, this is an additional benefit.
3) Get your free credit reports and closely examine them, but don't get them all at once. You get one from each of the three major credit agencies each year, but for the most part they'll be the same. For maximum coverage, stagger them. For example, you could get Experian in January, Transunion in May, and Equifax in September. Then you could start back at Experian once January rolls around again.
None of this is fool-proof, of course. No security ever is. But this does offer as good of a protection as you can get and there's no reason to make it easy on the criminals. Trust me: Even if you catch it before any damage is done, having your identity stolen is EXTREMELY stressful!