Data Breaches and Identity Theft: You and Your Children

You keep your anti-virus software up-to-date. You always look for the lock icon in the address bar of your browser. You don't share your passwords. You remember not to access your bank account from public wifi hotspots. You've talked with your kids about 5 ThingsYour Children Should Know about Computer Security.

You're safe right?

Sadly, no. The steadily growing number of major data breaches means that in spite of your best efforts, the bad guys have found a way to gain access to information about you that they can use to steal from you, ruin your reputation and credit, and/or make your life miserable. Recent examples include:

• 110 million - Target Stores. Bad guys stole 40 million credit and debit card numbers, plus full names, addresses, email addresses and telephone numbers for 70 million customers.
• 102 million - Sony Online Entertainment. Bad guys stole PlayStation Network login credentials, names, addresses, phone numbers and email addresses.
• 80 million - Anthem. Bad guys stole names, addresses, dates of birth, Social Security numbers and employment histories.
• 56 million - Home Depot. Attackers got away with credit and debit card information.

What can they do with this information?

With credit/debit card information, they can clone your card and make in-store purchases, or simply use it to make online purchases until you or the card issuer identifies a purchase as fraudulent. The good news is that under Federal law (technically, the Fair Credit Billing Act), a card owner's credit card liability is limited to $50. Debit/ATM card liability is covered under a different Federal law (the Electronic Funds Transfer Act), and is a function of how long you wait to report the the loss. (Don't wait). Losses on debit cards also require you to fight to get your money back, unlike credit cards.

The greater risk is when your Social Security number has also been stolen. This information, combined with your name, address, and birthdate, is in many cases enough to steal your identity. Because with this information, someone can open new credit accounts in your name, and roll up debts that you will be responsible for, until you can prove otherwise.

And it's not just you. What about your children? Odds are, they have pristine credit histories, ripe for theft. NBC News reported that millions of children were exposed to ID theft through the Anthem breach, and that some of the damage may not appear for years, until the child applies for a credit card or job and discovers the theft. Already happened to your family? Check the Federal Trade Commission's Consumer Information child identity theft website for help.

Can you count on companies to protect you? Evidence suggests that companies are either unable or unwilling to protect your personal and credit information. While in fairness they are locked in a battle with with bad guys, the evidence is overwhelming that they are behind, and consumers are the losers.

As the sample of recent data breaches outlined above illustrate, its only a matter of time before you will be a victim.

Three simple things you should do to improve your odds:

1. Don't use the same password on every site. If one site is hacked, you don't want the bad guys to have keys to your entire online life.
2. Check your credit report at each of the 3 reporting agencies each year. And your kids' reports. See: http://www.consumer.ftc.gov/articles/0155-free-credit-reports
3. Put a fraud alert or credit/security freeze on your accounts with these agencies. If you rarely apply for new credit or loans, go with the freeze. It will keep anyone from opening a new account in your name. If your children have credit accounts, consider freezing them, too. Go here for instructions: http://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs. If you frequently open new accounts, go with the fraud alerts, but recognize these only tell you when you've been attacked, are for a limited period of time and must be regularly renewed. Go here for instructions: http://www.consumer.ftc.gov/articles/0275-place-fraud-alert

Do it now.

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