Credit Freeze Won't Help w/Equifax Breach

A Credit Freeze Won't Help With All Equifax Breach Threats

There are other dangers you should know about. Here's how to protect yourself.

By Jeff Blyskal
 

If you’ve placed a security freeze on your credit reports at Equifax, Experian, TransUnion, and Innovis, that will help prevent fraudsters from opening new credit accounts in your name.

Freezing your credit report specifically at Equifax will also prevent crooks from registering as you at the government website, my Social Security, and block them from attempting to steal your Social Security benefits.

But taking these steps won't protect you against every identity fraud threat arising from the Equifax data breach.

With the information that hackers got, including access to Social Security numbers, birth dates, and an unspecified number of driver’s license numbers, you need to take other steps to help lock down your finances.

Here are three important ways you can protect yourself.

Tax Refunds

With your Social Security number, crooks can file false income tax returns in your name, take bogus deductions, and steal the resulting refund. More than 14,000 fraudulent 2016 tax returns, with $92 million in unwarranted refunds, were detected and stopped by the Internal Revenue Service as of last March.

Though you are generally not liable for such fraud, if a criminal manages to change your tax records and receive your refund, it can take months to straighten out the mess.

How to protect yourself. The best defense is to obtain an Identity Protection PIN from the IRS, which is a code that must be filed with your legitimate return for it to be accepted. An identity thief can’t file his fraudulent return without your PIN.

But you can get a PIN only if a fraudulent return has previously been filed in your name, if the IRS determines that you’re an ID-fraud victim, or if you live in a high tax-related identity theft locale such as Washington, D.C.; Florida; or Georgia.

The IRS would not say whether those affected by the Equifax breach would qualify for a PIN.

Andrew Mattson, a tax partner at the Moss Adams tax firm in Silicon Valley, recommends that taxpayers who don’t officially qualify for a PIN request one anyway, by filing a Form 14039, Identity Theft Affidavit (PDF). “Even if the IRS says no, your account will generally be flagged for additional monitoring for suspicious activity,” he says.

Mattson also recommends that you periodically view your IRS account information, which shows when returns were filed and which refund payments were made. Activity there—if it’s not yours—can be a sign of fraud. The balance updates every 24 hours, usually overnight, but there is a one- to three-week lag in the time it takes for refund payments to show up.

If you suspect fraud, contact your local IRS office using the Taxpayer Assistance Center Office Locator.

Health Insurance

Data from the Equifax breach can be used to steal your benefits from private health insurance, Medicare, or Medicaid when the identity thief uses your coverage to pay for his own medical treatment and prescriptions.

Many health insurers have internal special investigation units and anti‐fraud personnel to root out medical identity fraud, and if suspicious activity is detected, they’ll send email alerts to the policyholder, says Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, the trade association of health insurers.

How to protect yourself. Get copies of your medical records from providers to establish the baseline of your health before your records are compromised. Increasingly, online patient portals make this easy to do. Check back regularly to see whether providers you didn’t use are listed and whether you’ve been charged for treatments you never received.

In addition, review your free annual MIB Consumer File, which contains medical and personal information about you reported by health, life, disability, and other member insurers. Do the same for your Milliman Intelliscript report, which tracks your history of prescription drug purchases.

The Federal Trade Commission also says consumers should ask each of their health plans and medical providers for the “accounting of disclosures” related to their medical records. That tells who got copies of your records from the provider. The law allows you to order one free copy from each medical provider every year.

If available, sign up for your insurer’s secure online portal, and regularly review the explanation of benefits, which shows which treatments you received when and from which providers. While there, sign up for fraud alerts via email or text message, which will keep you apprised of benefit payments.

Regularly review your credit report for medical collection accounts that don’t belong to you.

Your Driver's License

Using your driver’s license number, identity thieves can create bogus driver’s licenses and hang their moving violations on you. With more work and information from phishing or further hacking, identity thieves can create bogus checks to pay a cashier, who “verifies” the shopper’s identity by writing your license number on the bad check.

If this happens to you, you may not discover how your license has been used until a police officer tells you, or perhaps, until a bank closes your account because of too many bounced checks.

How to protect yourself. Ask the motor vehicles department to give you a copy of your driving record; most states charge for this, usually about $10. To find out whether any bad checks are attributed to your driver’s license, request your free annual consumer report from each of the big three check verification companies, ChexSystems, Certegy, and TeleCheck.

If you find that your driver’s license is being used fraudulently, you can file a police report at your local police department and ask the motor vehicles department to flag your license number, which will alert law enforcement officers to be extra careful in identifying people they pull over with your license number. You should also request a new driver’s license number.

If you’re arrested or find criminal charges on your record, go to the Identity Theft Resource Center for advice on clearing criminal identity theft; if you find fraudulent checks on your record, follow the ITRC for advice on resolving checking account fraud. You can also call the center at 888-400-5530 for free assistance.

Correction: A previous version of this article said people should register at the government website my Social Security to protect their Social Security benefits. In fact, setting up a credit freeze with Equifax will stop identity thieves from setting up a my Social Security account in your name.