Published: June 23, 2006 05:16 pm         

Victims of data breaches need to monitor their credit

NEW YORK — The loss of a computer with the Social Security numbers and other personal data of some 26.5 million Americans who served in the armed forces is the latest reminder of how vulnerable consumers are in the information age.

The Department of Veterans Affairs is still hoping it will find the laptop, which was stolen from an employee’s home, before the information falls into the hands of identity thieves. The department has created a special page on the government website www.firstgov.gov to keep military personnel and veterans updated on the data breach, and it announced Wednesday that it will provide free credit monitoring for vulnerable veterans starting later this year.

While consumer experts applaud the moves, they suggest that military veterans — as well as victims of other data breaches — think about taking pre-emptive action now to protect themselves. Steps can range from putting “alerts” on their credit files to checking their credit reports on a regular basis every few months.

June Walbert, a certified financial planner with USAA, a financial services company in San Antonio that specializes in helping U.S. servicemen and their families, noted that there’s been a surge in security breaches as increasingly sophisticated hackers break into credit card and ATM systems, or computers and digital storage tapes go missing.

“It’s a shame it took such a huge breach like the VA situation to get people’s attention,” she said. “But the fact is, people need to understand their information is up for grabs and they need to take steps to protect themselves.”

Walbert has a personal stake in doing it right because she’s a lieutenant colonel in the U.S. Army Reserve and information about her may be on the missing computer.

She recommends consumers start by getting a free copy of their credit report, which they’re permitted to do under the Fair Credit Reporting Act, so they have a base line for future comparison. The easiest way to do this is to go the website www.annualcreditrepor t.com or to call (877) 322-8228.

There are three major credit bureaus — Equifax, Experian and TransUnion — and consumers can order one free report every year from each agency.

“I ordered one, and I’ll wait several months and order another one from a different agency,” Walbert said. “I think strategically timing your free credit reports is smart.”

Beth Givens, director of the Privacy Rights Clearinghouse in San Diego, notes that the government has told military personnel to keep close watch on their existing checking, savings and credit card accounts for signs of fraud.

“That’s not the right tip when your Social Security number is compromised,” she said. “You don’t need to worry so much about existing accounts as you do about new accounts being opened in your name but at some other address so you never see the bills.”

Givens suggests consumers have a temporary fraud alert put on their credit bureau accounts, which they can do by contacting any of the three main agencies. Equifax maintains www.equifax.com and can also be reached at (800) 525-6285; Experian, www.experian.com or (888) 397-3742, and TransUnion, www.transun ion.com or (800) 680-7289.

Once an alert is on your file, financial institutions checking it are supposed to be more diligent before they open new credit lines in your name. And, Givens said, consumers who put alerts on their files also will be offered a free credit report.

“The fraud alerts are only good for 90 days, so the individual will have to renew it every 90 days,” Givens said.

Nearly two dozen states also allow consumers to put security “freeze” notices on their credit reports. These, Givens said, can be even stronger than alerts because they basically block lenders from gaining access to a consumer’s credit report unless the consumer gives permission. A list of states with freeze laws can be found at the State PIRG website, www.pirg.org/consumer/credit/.

James Walsh, editor of “The Personal Security Handbook” from Silver Lake Publishing in Aberdeen, Wash., said the biggest problem with a breach such as the one at the Veterans Affairs Department is that “consumers face a lingering exposure — you may not know for months, or even years, if someone is going to misuse the information.”

Walsh recommends veterans consider paying for a monitoring service, which is available from each of the credit agencies, generally for about $10 a month.

“Buy the basic service,” Walsh said. “Don’t buy the platinum service and other add-ons.”

Generally the monitoring services will review credit reports daily for changes and send e-mail alerts if they detect new accounts, large loans or other credit activity.

“And, if you subscribe to a basic credit monitoring service, you can call your credit report up anytime you want,” he said. “You’re buying peace of mind.”

Walsh also recommends consumers become more vocal in complaining to institutions caught up in data breaches.

“People should get angry and raise a ruckus and tell the Veterans Affairs Department that it’s an outrage that their data security policy is so weak ... that their information was available like a treasury map for an ID thief,” he said. “Then maybe things will start changing.”

On the Net:

www.usaa.com

www.privacyrights.org

www.silverlakepublishing.com

     

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