In a world where data breaches, credit card fraud and identity theft are becoming more common, consumers should consider ways to protect themselves.
In a world where data breaches, credit card fraud and identity theft are becoming more common, consumers should consider ways to protect themselves. Elizabeth Kiss, faculty member in Kansas State University’s Department of Family Studies and Human Services, said with mega data breaches coming from entities such as retail stores, insurance providers and restaurant chains, someone could more easily gain access to personal financial information that consumers have legitimately shared with companies.
“It’s always a good idea to know what is happening with your credit and your credit report to keep your personal identifying information safe,” said Kiss, who is a family resource management specialist for K-State Research and Extension.
Sometimes it takes companies that have faced a mega data breach months to figure out specific compromised information and the consumers affected, she said. If you know your information could have been compromised as part of a data breach, consider placing an initial fraud alert on your credit card account. Initial fraud alerts tell credit card companies to monitor your account closely, typically for 90 days.
If you are still concerned after the 90 days or perhaps are affected by another data breach, go for an extended fraud alert, Kiss said. An extended fraud alert lasts seven years. The fraud alerts are free, and you wouldn’t necessarily need to file a police report to issue those.
According to the Federal Trade Commission, to place a fraud alert or extended fraud alert, contact one of the nationwide credit reporting companies. You must provide proof of your identity. The company you call must tell the other credit reporting companies, so they also will place an alert on their versions of your report.
Creditors can still get a copy of your credit report after taking steps to verify your identity while fraud alerts are in place, according to the FTC. Fraud alerts can be effective in stopping a criminal from opening new accounts in your name, but they cannot prevent the misuse of your existing accounts.
If issuing a fraud alert and extended fraud alert aren’t enough, Kiss suggested considering a credit freeze, especially if you believe your credit information has been compromised and someone else is using your information. A credit freeze is a security freeze that lets you restrict access to your credit report, locks down your credit and makes it difficult for criminals to open new accounts in your name.
“A credit freeze means you prevent anyone from getting your free annual credit reports, and you keep people from using your information, including yourself, to get any new credit,” she said.
A credit freeze requires a fee, and you would likely face other fees to temporarily lift the freeze or unfreeze it completely. The credit freeze fee is state specific and normally ranges from $5 to $10. Kansas’ credit freeze fee is currently $5, but could change at any time.
During a credit freeze, your existing creditors or debt collectors acting on behalf of those creditors could still access your credit report, according to the FTC. Government agencies that need your credit report in response to a subpoena or search warrant would also have access.