Thoughts On The Equifax Data Breach
Chances are the data breach announced by Equifax affects you. Hackers were able to access social security numbers, drivers’ license numbers, birthdates, addresses and credit card numbers from about 143 million people. This is a mind-blowing number.
For years, we’ve all been bombarded by ads from the 3 major credit union telling us that we need to purchase credit reports from them and credit monitoring services because all kinds of bad things could happen if our data is stolen. Little did we know, that stolen data would come from them. Maybe it’s not fair to lump all 3 of the companies together. But as we know, we’re judged by the company you keep (I’m a lawyer so I must be an unethical, money-grubbing, bottom feeder who went to law school because I got tired of serving fries).
Equifax has posted an online tool to check if you have been affected. But use this tool with caution. An article has indicated that your individual results may vary if you use it more than once. So if it tells you you’re in the clear, don’t assume you actually are. Likewise, if it says you were part of the breach, don’t panic. No matter what, take prudent steps to protect yourself.
Arbitration
There has been a lot written about Equifax and their arbitration clause. It seems that just by using the tool, you were agreeing to mandatory arbitration. New York’s Attorney General has already expressed his opposition to this clause. Equifax has since clarified that the arbitration clause does not apply to the breach.
An open issue, to me, is what about arbitration clauses for people who are already Equifax customers? Having not seen the agreements, I can’t say for sure whether or not it applies, but I would argue it doesn’t. Sometimes, public policy trumps a contract.
In this case, I think public policy would say that you can’t be forced into binding arbitration for an event that is so outrageous and so injurious that it could never have been contemplated. Especially when there will likely be a question of negligence.
Credit Monitoring
Equifax is also offering a year of free credit monitoring. But beware. Reports indicate that you must sign up with a credit card and you will be automatically renewed when the year is up. (Update: Equifax is no longer requiring a credit card.) This is particularly galling. The idea of credit monitoring is to protect you against a data breach. When the data breach itself is from the company selling credit monitoring, it certainly seems tone-deaf.
My recommendation is to make sure your credit card expires in less than a year. Some credit card companies allow you to create a temporary number that is only good for one use. This service is a great one to use in general if you are worried about your credit card information stolen.
You may already have access to free credit monitoring. Some AAA plans include it as a part of their membership. Some credit card companies also include credit monitoring as a perk. Check with your alumni groups or insurance company to see if it’s a benefit available to you.
Fraud Alert
At a minimum, you should place a fraud alert on your credit file. These are only good for 90 days (they can be renewed), which is not nearly enough time to thwart a potential use of your credit, but it’s long enough to let the dust settle and see what Equifax and the other credit bureaus are going to do. I imagine politicians are going to get involved and there will be many, many lawsuits (Update: And they’ve started piling in).
To place a fraud alert, contact one of the 3 credit bureaus. If you place the alert on one, they are required to notify the other two.
Equifax
P.O. Box 7402741
Atlanta, GA 30374
Report Credit Fraud:
(800) 525-6285
Request Credit Report:
(877) 322-8228
www.equifax.com or https://www.alerts.equifax.com/AutoFraud_Online/jsp/fraudAlert.jsp
TransUnion
P.O. Box 2000
Chester, PA 19022
Report Credit Fraud:
(800) 680-7289
Request Credit Report:
(877) 322-8228
www.transunion.com
Experian (TRW)
P.O. Box 2002
Allen, TX 75013
Report Credit Fraud:
(888) 397-3742
Request Credit Report:
(877) 322-8228
www.experian.com
Credit Report
Remember that each of the 3 major credit bureaus must, by law, provide you with a free credit report once a year. More info is available at http://www.annualcreditreport.com.
If you have legal questions about how this data breach may affect you or your business, contact us for a consultation to discuss your concerns.