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CHIPS Articles: Equifax Data Breach: Should you consider a fraud alert or credit freeze?

Equifax Data Breach: Should you consider a fraud alert or credit freeze?
By CHIPS Magazine - September 19, 2017
Many people are confused and concerned in the aftermath of yet another massive intrusion into the privacy of millions of individuals. Equifax, one of the nation’s three major credit reporting agencies, revealed this month that the personal data of 143 million American consumers was exposed in a data breach.

According to Equifax, the breach extended from mid-May through July. Intruders accessed people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also stole credit card numbers for about 209,000 people and dispute documents with personal identifying information for about 182,000 people. In the breach, hackers also snatched the personal information of people in the UK and Canada.

Which should you choose: fraud alert or credit freeze?

The Federal Trade Commission advised in a release that you don’t need to be an identity theft victim to implement either a fraud alert or credit freeze on your accounts. The FTC recommends that you consider your situation and offers the tips below.

What do fraud alerts and credit freezes do? With a fraud alert, businesses must try to verify your identity before extending new credit. Usually that means calling to check if you’re at a particular store attempting to take out new credit. With a credit freeze, no one — including you — can access your credit report to open new accounts. You will receive a PIN number to use each time you want to freeze and unfreeze your account to apply for new credit.

How long do fraud alerts and credit freezes last? A fraud alert lasts for 90 days. You can renew it but you will need to remind yourself or it will expire automatically. Identity theft victims are entitled to an extended fraud alert, which lasts for seven years. In almost all states, a credit freeze lasts until you temporarily lift or permanently remove it. In a few states, it expires after seven years.

How much do they cost? Fraud alerts are free. Credit freezes may involve fees based on state law. In most states, they are free for identity theft victims. For non-victims, they cost about $5 to $10 each time you freeze or unfreeze your account with each credit reporting agency.

How do I place a fraud alert or credit freeze? To place a fraud alert, contact any one of the three major credit reporting agencies, either by phone or online. The one you contact is required to notify the other two. If you’re an identity theft victim placing an extended fraud alert, you’ll also need to mail or upload your Identity Theft Report which you can create at IdentityTheft.gov. To place a credit freeze, you must contact each of the three credit reporting agencies individually at their credit freeze portals.

Credit freezes may be a strong tool but they may not be for everyone, the FTC advises. You should consider the cost and hassle factor. If you’re about to take out new credit (apply for a mortgage, car loan, student loan), then you will have to unfreeze and refreeze each time you need new credit. But if you won’t need new credit soon, then a credit freeze may be for you.

If you still are not sure, the FTC provides additional information, check out Place a Fraud Alert, Credit Freeze FAQs, and Extended Fraud Alerts and Credit Freezes.

See also Equifax Data Breach: What to Do Now by an FTC attorney.

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