Financial

Credit Monitoring

On September 30, I received a letter from Change Healthcare about a data breach that occurred involving my mother's information. The letter was dated September 2, 2024. It took over 3 weeks for the letter to reach me. The data breach occurred in February 2024. I already monitor credit information. But this is a reminder that we must all monitor our credit and not wait to be notified of breaches. Take steps now to protect your credit and that of your loved one. 

Dangers of Data Breaches

Data breaches pose serious risks because they expose sensitive personal information, such as Social Security numbers, credit card details, medical records, and passwords. This information can be used by cybercriminals for identity theft, financial fraud, or to blackmail individuals and organizations. The consequences of data breaches include:

  • Identity Theft: Stolen personal information can be used to open new credit accounts, take out loans, or file false tax returns in your name.
  • Financial Loss: Fraudulent transactions or unauthorized use of financial accounts can lead to monetary losses.
  • Damage to Reputation: Organizations may suffer damage to their reputation, leading to loss of business, while individuals can face social or professional harm if sensitive data is leaked.
  • Emotional Stress: Victims of identity theft often face prolonged stress as they try to regain control of their financial lives.
  • Legal and Regulatory Penalties: Organizations may face lawsuits, fines, or other penalties for failing to protect consumer data.

Recent Data Breach Statistics

Data breaches have been rising in both frequency and severity in recent years:

  • 2023: Over 5,000 breaches were reported, exposing more than 150 million sensitive records globally.
  • Most Common Sectors Affected: Healthcare, financial services, and retail.
  • Largest Breaches:
    • In 2023, MOVEit Transfer, a widely used file transfer software, was exploited in a breach that affected 37 million individuals.
    • Latitude Financial in Australia suffered a breach in 2023 impacting 14 million consumers, where sensitive identification details such as driver’s licenses and passport numbers were exposed.
  • Average Cost: According to IBM, the global average cost of a data breach in 2023 was $4.45 million, an increase of 15% over the past three years.

How to Protect and Monitor Credit

  1. Use Strong, Unique Passwords: Use complex passwords and enable multi-factor authentication (MFA) to make it harder for hackers to access your accounts.

  2. Monitor Financial Statements: Regularly check bank and credit card statements for unauthorized charges. Immediately report any suspicious activity to your financial institution.

  3. Credit Monitoring Services: These services notify you of any changes in your credit report, such as new accounts being opened in your name. Many credit bureaus and third-party companies offer monitoring.

  4. Place a Fraud Alert: If you suspect that your data has been breached, place a fraud alert on your credit report. This makes it harder for identity thieves to open new accounts.

  5. Freeze Your Credit: A credit freeze prevents lenders from accessing your credit report, which makes it nearly impossible for anyone to open new accounts in your name. This is free to do with the three major credit bureaus (Equifax, Experian, and TransUnion).

  6. Use Identity Theft Protection: Services like LifeLock, IdentityForce, and others can help monitor for unauthorized use of personal information and assist in recovery if your identity is stolen.

  7. Review Your Credit Report: By law, you're entitled to a free credit report from each of the three major credit bureaus once per year. Regularly reviewing your report helps you spot suspicious activity. You can access your free reports at annualcreditreport.com.

Taking proactive steps like these can minimize the risk and impact of a data breach, helping you stay on top of your credit and personal information security.