WannaCry, Petya, and Equifax first come to mind when you think of the most impactful cyber events in recent years, with the first-year anniversary of the latter coming up September 7th. Impacting nearly 150 million Americans (essentially half the country), the breach changed the nature of identity theft. Now, just before its anniversary, let’s take a look back on the impact of the Equifax data breach, what it all means for consumers, and the current state of identity theft.
When the Equifax breach was first announced, the number of those impacted was said to be around 140 million U.S. consumers. But the amount was actually higher than what was originally stated by Equifax, later swelling to 147.9 million. The information impacted included names, dates of birth, addresses, and Social Security numbers. All the right ingredients needed to steal an identity.
In response to the breach, the company launched a program to alert potentially affected consumers that their data may have been exposed, as well as offered a free year subscription to its credit monitoring service, TrustID. But Equifax still felt quite a few ramifications itself from the attack. The company reports that it has incurred $314 million of expenses related to the breach since its September 2017 announcement. It is still expecting $85 million of breach-related expenses in the third quarter this year and $300 million in total for the full year, excluding insurance recoveries. In its most recent earnings call, the company’s second-quarter net income dropped 12% from a year earlier on higher expenses, including those related to its massive 2017 data breach.
Unfortunately, Equifax is not the last we’ve seen of identity theft breaches. Identity theft breaches are up 44% overall with 1,579 reports last year, and there are likely even more that went unreported. Exposed records due to data breaches are up 389%. Roughly 179 million records have been stolen, with 14.2 million credit card numbers exposed in 2017, an 88% increase over 2016. What’s more, 158 million Social Security numbers were exposed last year, an increase of more than 8 times from 2016. And all this theft has added up – consumers reported $905 million in total fraud losses last year, a 21% increase. So, it only makes sense that identity theft ranked as roughly 14% of all consumer complaints to the FTC last year.
However, despite all the publicity about the Equifax breach, consumers have done very little or have changed very little largely due to optimism bias. In fact, a recent McAfee survey shows that despite increased consumer concerns, only 37% of individuals use an identity theft protection solution and 28% have no plans to sign up for an ID theft protection solution.
So now the next question is, what should consumers do to protect themselves against identity theft? Start by following these tips:
- Place a fraud alert. If you know your data has been compromised, place a fraud alert on your credit so that any new or recent requests undergo scrutiny. This also entitles you to extra copies of your credit report, so you can check for anything suspicious. If you find an account you did not open, report it to the police or Federal Trade Commission, as well as the creditor involved so you can close the fraudulent account. Then, make sure you correct your credit report by filing a dispute with each of the three credit bureaus.
- Freeze your credit. This allows you to seal your credit reports so no one else can take out new accounts or loans in your name. You can do this without impacting your existing lines of credit, such as credit cards. If you want to apply for services or open new accounts, you can temporarily “unfreeze” your credit using a personal identification code only you have.
- Invest in an identity theft monitoring and recovery solution. With the increase in data breaches, people everywhere are facing the possibility of identity theft. That’s precisely why they should leverage a solution tool such as McAfee Identity Theft Protection, which allows users to take a proactive approach to protecting their identities with personal and financial monitoring and recovery tools to help keep their identities personal and secured.