Data Theft

I just about tossed the envelope without opening it; the address window looked like other junk mail. But then I saw a notice in red ink just below the postal barcode: “Important Security and Protection Notification. Please read this entire letter.” Okay, that provided reason enough to reach for the letter opener.

I had never heard of the company, but it said it was a guarantor of federal student loans. I had a few of those in the early 1970s for undergraduate study and one in the mid 1980s for my masters work. So now in 2010, at least 25 years later, I receive notice of a data theft. Information about a student loan, including my name, Social Security number, and date of birth, had been stolen in March. The company reported the intrusion to law enforcement agencies and was now informing the individuals put at risk.

I immediately registered for the alert system which would monitor the three credit bureaus for any funny business. This is provided without cost to me for one year. Hopefully the thief doesn’t patiently hold my information and start doing the mischief after the free monitoring period expires.

The letter also suggested getting a free credit report to look for suspicious activity. So, I went to www.annualcreditreport.com to print reports from the three credit bureaus: Experian, Equifax, and TransUnion. I had done this once before, soon after the Federal government mandated that individuals be provided a free credit report once each year. The first time I checked to see that all of the entries were, in fact, accounts I had opened. This time, I paid more attention to the type of information the bureaus gather.

The bureaus track four types of credit accounts. I found notations about our current mortgage company as well as the mortgage provider we had before moving to Kansas. I also found that the mortgage company does an annual credit check on the anniversary of when we purchased our current house. I found one record of installment credit; we purchased a car when the automobile maker was offering a 60-month loan at an interest rate considerably lower than what a money market fund paid at the time. We have a few revolving accounts, credit cards that we pay off in full each month. We don’t have any other type of account.

For these various types of accounts, the credit report included the balance history, the high balance, the recent balance, the payment history, and the recent payment. The date the account was opened was listed as was the status of the account. All of my accounts were either “open/never late” or “paid, closed/never late.” One account with a department store was “closed at credit grantor’s request;” in other words, I never used the card. I also discovered that the company that provides my auto and homeowners insurance has checked my credit report.

One of the credit bureaus suggested that I get my credit score—for an extra fee. No thanks. But that does suggest that they have other data and calculations that don’t show up on the free credit report.

This isn’t the first notice I’ve received about data theft in which my information ended up in the hands of an unauthorized person. I’m fairly certain it won’t be the last. I’m not prone to obsess over conspiracy theories, but I realize thieves will refine their techniques. I believe companies are vigilant, as demonstrated by the measures described in the letter I received. Law enforcement agencies have increased their efforts to clamp down on such illegal activities. Consumer education regularly comes in many forms: enclosures with financial statements, online resources, and articles in newspapers and magazines. It will continue to require vigilance, but I’m hopeful we can stay one step ahead of the crooks.

As consumers, we can do several things to minimize potential trouble. First, ignore unsolicited offers. I recently had a friend awakened by a phone call. He said “yes” when he should have hung up. He wouldn’t read the free magazines—that was the hook—and he couldn’t afford the monthly charge for a computer service he didn’t need. Due diligence is essential in all financial matters and for me that usually means tossing unsolicited offers.

Second, provide only the need-to-know information. When I recently registered as the owner of a new television, the company asked all kinds of questions that had nothing to do with being able to contact me should there be an equipment recall. So I just skipped questions about the ages of those living in my household and the household annual income.

Third, pay attention to all account statements. If you find something that doesn’t seem correct, immediately do something about it. I’ve made calls to a credit card company about a transaction that I didn’t understand only to discover that it was a legitimate charge, but I’ve also disputed erroneous charges. I generally have other things I’d rather be doing, but quick attention to these matters is important.

Originally published by Pensions & Benefits USA.