Consumer data breach

consumer data breach
Consumer data breach (infographic from breachlevelindex.com)

If you haven’t heard of the Equifax consumer data breach then you’re either uninformed or you just don’t care. Regardless, this breach of personal and private information should make you very concerned.  If not for your own personal data, then for our economy.  The Equifax breach was a massive data heist that included names, birth dates, addresses, phone numbers, and in some cases driver’s license numbers.

Besides causing personal harm, this data breach has the potential to wreak widespread economic havoc.  It was reported that the hack could impact up to 143 million consumers (almost half the country’s population is at risk).  If only 1 percent of the 143 million are not able to buy a home as a result of this data breach because of identification fraud or other credit report problems, that would be about 1,430,000 fewer homes sold, which is about 26 percent of all the existing homes sold in the US last year.  To put it in perspective, there was only a 20 percent drop in existing home sales from market peak (2006) to trough (2009) triggering the worst housing market since the Great  Depression and wiping out much of the country’s real estate wealth.

Let’s be clear, this is not a wake-up call.

The wake-up call came years ago when consumer data breaches and hacking first got the attention of the public and government.  Since, the snooze alarm has continually been reset.  According to the Privacy Rights Clearinghouse (privacyrights.org), since 2005 there have been 7,671 data breaches totaling to 1,070,164,636 records breached.  The clearinghouse only counts the data breaches that “have a high chance of exposing individuals to identity theft.”

One of the first consumer data breaches to draw government ire and fines was the Choicepoint breach in 2005.  The 145,000 consumers affected by that breach pales in comparison to the Equifax consumer data breach.  Choicepoint was fined $10million by the FTC as well as having to provide $5million for consumer redress.

Since Equifax’s public announcement of the consumer data breach, Congress and the Consumer Financial Protection Bureau has called for hearings.  Of course, hearings take time and are a knee jerk reaction to the damage that has already been done.  But the hearings will address the many questions surrounding this incident, such as: how the hack occurred; why it allegedly took Equifax two months to reveal the hack; and why were Equifax executives allegedly allowed to sell company stock before the data breach announcement?

And because of the potential financial and economic impact of hacking and consumer data breaches, the questions that should also be asked include: Why hasn’t government taken steps to protect such information prior this data breach?  How will government protect consumers moving forward?

Are consumer data breaches becoming acceptable?

Equifax’s incident is not the first of its kind, and unfortunately, nor will it be the last.  But it is the largest breach of private and personal information to date.  This incident should make you wonder if the stewards of our private and personal information, along with the government agencies and bureaus, are incapable of or not totally invested in protecting the consumer.

Be vigilant.

Equifax has set up a site to check if you’re affected by this data breach, however many have demonstrated that it does not work properly.  It may be best to assume you’re at risk and take necessary actions to protect yourself. The Federal Trade Commission (www.consumer.ftc.gov/blog/2017/09/equifax-data-breach-what-do), the CFPB (www.consumerfinance.gov/about-us/blog/identity-theft-protection-following-equifax-data-breach) offer tips in protecting your personal and private data.

Original published at https://dankrell.com

Copyright© Dan Krell
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Protected by Copyscape Web Plagiarism DetectorDisclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Credit reporting changes may help home buyers

money to buy a home

It’s no secret that your credit report can affect your ability to buy a home. Most mortgage lenders impose minimum credit score requirements to qualify; and tiered interest rates can cost you hundreds of dollars if your credit score is too low.

Your credit score is used as a predictor of your ability to manage debt. The score is the result of an analysis of information that is reported about you to the three credit reporting agencies; and is produced by each agency’s proprietary algorithm. Typical information that can be found in your credit report includes revolving and installment credit accounts, such as credit cards, home equity lines of credit, mortgages, and auto loans. Reported late payments, collections, and judgments can adversely affect your credit score.

Financial experts recommend you review your credit report annually to ensure accuracy, and dispute incorrect information. Annualcreditreport.com is the only authorized website where you can obtain a free annual credit report.

Correcting credit report errors can be tedious; and unfortunately, the outcome may not please you. However, this could change as a result of a recent settlement between New York Attorney General Eric Schneiderman and the three credit reporting agencies. A March 9th press release (ag.ny.gov) announced a settlement with the three credit reporting agencies to “improve credit report accuracy; increase the fairness and efficacy of the procedures for resolving consumer disputes of credit report errors; and protect consumers from unfair harm to their credit histories due to medical debt.” The statement quoted a 2012 FTC study that suggested that millions of consumers’ credit reports contain errors. The study indicated that 26% of the participants reported at least one error; and about 13% of the participants reported a positive change to their credit score after disputing errors.

The Consumer Data Industry Association (which represents the consumer data industry, including the three credit reporting agencies) also announced on March 9th (cdiaonline.org) the creation of the National Consumer Assistance Plan. Stuart Pratt, President and CEO of the Consumer Data Industry Association, stated; “The National Consumer Assistance Plan we are announcing today will enhance our ability to offer accurate reports and make the process of dealing with credit information easier and more transparent for consumers…”

The implementation of the National Consumer Assistance Plan (NCAP) is expected in upcoming months, and is focused on improving how consumers interact with the credit reporting agencies, as well as data accuracy and quality. The NCAP is to build upon recent improvements to consumers’ experience with the credit reporting agencies, which includes a 2013 digital application to facilitate credit report disputes. To ensure consistent and uniform data submission to credit reporting agencies, a multi-company working group is to be formed.

To improve the consumer experience, the NCAP is to: provide expanded credit report education; provide dispute results and suggestions on what to do if not satisfied with dispute outcome; and enhance dispute resolution for proven victims of identity theft and fraud.

To improve data accuracy and quality, the NCAP is to: implement a “waiting period” of 180 days for medical debt; remove previously reported medical collections that have been paid, or being paid by insurance; reinforce consistent standards for data submission; reject data that does not include a date of birth; and eliminate reporting debt which did not arise from a contract or agreement to pay (e.g., tickets or fines).

By Dan Krell
© 2015

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Your credit report reveals more than you might know

by Dan Krell © 2013
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DanKrell.com

Why is your credit report important?

Bethesda real estateInformation contained therein could determine whether or not you qualify for a mortgage, and possibly the interest rate you are offered. Typically, lenders use credit reports to determine how you generally manage your debts and financial obligations. Besides being used by mortgage lenders; some banks may review your credit report when you apply for a checking account, and even some insurance companies may use your credit report for underwriting purposes.

Your credit report may say more about you than you might know. The report is considered to be a “snapshot” of your financial management ability. The major credit bureaus, Equifax (equifax.com), Experian (experian.com), and Trans Union (transunion.com), act as information repositories for collected information, and make it available to those who need it. The credit bureaus are informed of your activities by your creditors as well as collecting information from public records; the collected information may include details about your identity, existing credit, public records, and recent inquiries.

Identity information may list your name and aliases, address, Social Security number, date of birth, and possibly employment information. Existing credit information lists accounts that are granted to you, and may include: credit cards, mortgages, student loans, and car loan accounts, payment history, and current balance. Public records may reveal liens, judgments, bankruptcies, and open collections.

Anyone with a legitimate need for your credit report can obtain it. Besides banks, lenders, and those who extend credit, others who may be able to view your credit report include (but not limited to) employers, landlords, and child support enforcement. These inquires are listed in the report.

Your credit score is also included in your credit report. Because each of the three credit bureaus use their own algorithms to determine your score based on the bureaus’ information, the three scores may vary somewhat. Many credit decisions are initially determined on credit scores, so it’s important to ensure that the reports are accurate so as to reflect in your credit scores.

Factors that may negatively impact your credit scores include (but not limited to): late payments, accounts referred to collection, and/or reported bankruptcy; having high account balances relative to credit limits; applying for many accounts in a short period of time; and having an excessive number of credit accounts.

With such importance placed on credit reports, it’s important to ensure your reports contain accurate information about you and your credit history. Unfortunately, inaccurate data may find its way into your report through poor reporting, misidentification, and even non-reporting of (positive) information. Additionally, identity theft has been a law enforcement issue for years; and is increasingly considered a major public threat.

You can dispute erroneous data with the reporting company, and/or the credit bureau. If you dispute to the credit bureau, the bureau will undergo an investigation. To assist the investigation, the bureau may require your identifying information, an explanation why the reported information is incorrect, and supporting documentation (such as receipts, police reports, and/or fraud affidavits).

Your credit report is considered to be a “snapshot” of your life and your ability to manage credit. Financial experts recommend that you request your report from each bureau annually to ensure the information is accurate. For more information on credit reports and scores, refer to the Federal Reserve (federalreserve.gov/creditreports), the FTC (ftc.gov), and the Consumer Financial Protection Bureau (consumerfinance.gov).

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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published the week of April 22, 2013. Using this article without permission is a violation of copyright laws. Copyright © 2013 Dan Krell.

Your credit report = Your permanent record

by Dan Krell &copy 2009
www.DanKrell.com

Did you have a “permanent record” in school? Well, believe it or not, you still have a permanent record; it is called your credit report. Because your credit report can influence more than your ability to get a mortgage, it’s important to ensure that it is accurate.

Many in the credit industry call the credit report a “snapshot” of your credit use; how much credit you take and how you pay it back. In truth, it’s a bit more; it’s a snapshot of your life. The Federal Reserve board of San Francisco (frbsf.org) describes a typical credit report as containing personal identifying information, credit information, public information, and inquires into your credit report. Besides indicating your name (and aliases), birthday and social security number, your credit report may also indicate your current and past addresses, current and past telephone numbers, and current and past employers. Your credit report may also indicate your present and past spouses along with their personal information!

The credit information indicated on your credit report usually includes revolving credit (such as credit cards) and installment loans (which includes mortgages, auto loans, and student loans). The information reported includes the date the account was opened, the amount loaned and/or credit limit, the type of account, any co-signer, and of course your payment history. Additionally, the report also indicates collection activity undertaken to have you repay any unpaid accounts. Collection activity can be reported for charged off credit cards, foreclosure, and for such items ranging from hospital bills to child support.

Public information refers to records kept in the county, state, and federal courts (and is available to the public). Information that may appear in the public records section includes bankruptcies, personal liens, and judgments.

Anyone claiming that they have a legitimate need to see your credit report can order it through one of the credit reporting agencies; these inquiries are listed in your credit report. Besides banks, lenders, and those who extend credit, others who may be able to view your credit report include (but not limited to) employers, landlords, child support enforcement, and government agencies.

Credit reporting agencies such as Equifax (equifax.com), Experian (experian.com), and Tran Union (transunion.com) act as information repositories and collect all the information described above. Besides collecting information about you from creditors and public records, it is possible that credit reporting agencies may accrue information from other sources too. The information that is accrued about you is analyzed to produce your risk score. Each credit reporting agency uses a complex algorithm to compute your score which is widely used in decisions to extend you credit.

Given the amount of information that is processed by credit reporting agencies, it is common for errors to appear. To ensure your credit report information is accurate, you have the right to receive your credit report from each of the credit reporting agencies once a year. You can order your credit report either from annualcreditreport.com or from each of the credit reporting agencies (see above). You can dispute any errors by following the instructions for each credit reporting agency. For additional information on disputing credit report information you can refer to each of the crediting reporting agencies above as well as the Federal Trade Commission (FTC.gov).

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of September 14, 2009. Copyright © 2009 Dan Krell