Money Matters: Data breach basics

The personal information of almost half of all people in the U.S. was exposed in a data breach of credit service Equifax in 2017. Now, the company has agreed to a $700 million settlement with benefits available not only to all 147 million people whose information was affected, but all U.S. consumers. In the same week as the settlement, a tech worker stole personal information for about 100 million U.S. consumers affiliated with Capital One, including social security numbers and bank accounts for as many as 140,000. There’s no evidence the information was sold, exposed or used for fraud, but Capital One will still offer free credit monitoring to those affected. Here are some more key questions on the Equifax settlement and for consumers to know about data breaches in general:

Who should opt for the cash and when is the free credit monitoring a better option?
Initially, the Federal Trade Commission (FTC) claim information indicated that consumers who already have credit monitoring would be eligible for cash payments of $125 instead, but the response to the settlement has already been so overwhelming that within a few days, the FTC warned that that payment could end up much smaller, and urged people to select the credit monitoring option.

According to the Federal Trade Commission, “this monitoring service is probably stronger and more helpful than any you may have already, because it monitors your credit report at all three nationwide credit reporting agencies, and it comes with up to $1 million in identity theft insurance and individualized identity restoration services.”

However, if your information was not only compromised, but you spent money to freeze your credit or were the victim of identity theft that may have been related to the breach, costing you time and money, you could be eligible for reimbursement of some of your expenses in addition to the cash or credit monitoring options. But be prepared to provide proof of expenses.

What’s the deadline to file a claim?
File a claim by January 22, 2020.  Set a reminder in your calendar for early January to remind your audience to get their claims in.

Do you have to file a claim to get benefits from the settlement?
No. Beginning in January 2020, all U.S. consumers will be able to access free Equifax credit reports (up to 6 per year) for 7 years, without needing to file a claim. And if you discover your identity is stolen in the next 7 years as a result of the breach, you’ll get access to identity restoration services at no cost.

What should people watch out for?
Scammers are already taking advantage of the settlement news to create fake settlement websites to steal personal information.  The FTC is warning consumers that you should never pay to file a claim, and that you should only enter your information on the official settlement website, accessible at https://www.ftc.gov/Equifax.

What can you do if your data exposed?

• Freeze your credit or set up fraud alerts – Freezing your credit prevents potential creditors (like landlords, credit card companies, and banks) from pulling your credit report, which is usually done when opening a new line of credit, so it can stop fraudsters from using your personal information. Fraud alerts will not freeze your credit, but will alert you if any new accounts are open so you can take appropriate action. Remember, there are three major credit bureaus.
• Sign up for credit monitoring services – Most banks will let you check your credit score regularly, but don’t mistake that for credit monitoring, which alerts you to credit requests and report updates as well as checking the internet for your personal information.
• Watch your bank and credit card statements carefully!

Weekly Money Matters personal finance content for your newsroom is sponsored by the National Endowment for Financial Education. Learn more at the Money Matters session at Excellence in Journalism.