If I had asked this question a few months ago I would have been told it’s all a conspiracy. But today, very serious people are discussing the financial benefits to Equifax as a result of their recent security breach. Hackers have millions of people’s personal data and Equifax may benefit from it.
Here’s How The Company Can Profit
As a result of Equifax’s recent data hack, they are offering 1 free year of credit monitoring. However, the data stolen from Equifax may be valuable to the criminals for the rest of your life. Information such as your social security number, date of birth, and housing history are critical to your financial security. You’re asked these questions every time you take out a loan or apply for credit. The reason you’re asked this information is to confirm your identity with the various credit agencies.
The credit monitoring service that is being offered for one year will not protect you forever. It normally costs about $20/month. By signing up millions of Americans for this service, they are poised to make billions of dollars starting one year from now. If only the 143 million Americans affected signed up and stayed on for an additional year, the company would
earn receive over $34 Billion.
But it actually gets worse. Many places are reporting that the offer isn’t open yet. If you want your “credit monitoring” to start right now, you need to go ahead and start paying. If you want to wait for your one free year, you’ll just be a greater risk for a little while.
That means that they could already be seeing some of these profits.
Individuals Profiting From The Hack
It has also been reported that 3 high-level executives sold shares after the hack, but before it was reported to the public. These executives made millions of dollars each selling their shares of the company. Worse yet, these executives could be in a position to earn much more.
If the credit monitoring services provided by Equifax increases its user base by millions of Americans, the stock prices will likely bounce back in 6-12 months. If these executives buy the shares back as stock prices hit the bottom, they could still make millions of dollars while not having lost any shares.
There are calls to have these executives investigated by the SEC (Securities and Exchange Commission). For now, the company is claiming that these executives didn’t know about the hack. This seems unlikely, but we’ll have to wait and see if the SEC can prove otherwise if they even go through with the investigation.
What You Can Do
I’ve had my credit frozen for years. I recommend you do it NOW! And not just with Equifax, your credit needs to be frozen with all three of the major credit bureaus. Jason Hanson wrote an article on how to do this nearly 2 years ago. You can find out how to freeze your credit by clicking here.
Don’t trust the people who lost your information to protect you with their credit monitoring services. Freeze your credit. It’s the only way to keep someone from opening accounts in your name.
Understand that this will not protect you from other forms of identity theft. Driver’s license and credit card numbers were also stolen. I’ve seen news reports on this that state that freezing your credit will protect your information. Either these people made a mistake or they have no idea what they are talking about. Freezing your credit will keep people from being able to open lines of credit in your name, but your information is already out there.
I spoke with a security representative from the company I have a credit card with on this issue. He recommended that I simply report my credit card as lost or stolen and they would immediately ship out a new card with a new number. Hopefully, other credit card companies are offering the same protection for their customers. Contact your credit card companies and ask for a new card if they do.
Your driver’s license is an entirely different problem. I spent half an hour on hold with the North Carolina DMV and never got an answer on changing a license number. What a surprise. I’ll update this post if I finally get some information on cleaning up this security risk.