The Equifax Hack: What Do You Need To Know?
In case you didn't have the time to read up on our posts on the Equifax hack, there's quite a bit to catch up on, which we'll do here. Equifax is a credit reporting agency. This does not mean that it provides credit towards consumers, but rather it collects, stores, and packages consumer data for agencies that do provide credit. As such, hacking Equifax has exposed a large amount of personal information. So, what are the important concerns for consumers? What ways may they obtain compensation? What can we learn from these hacks?
The emphasis of this hack is the exposure of personally identifiable information for consumers. The credit reporting agencies (e.g., Equifax, Experian, TransUnion) are supposed to collect and protect personal information. They can do this by receiving information from creditors that obtain information from individuals, or from the individual directly through a consumer offering. All of this is done to facilitate the issuance of credit cards, as it provides a quick and easy way to determine the "credit worthiness" of a person. However, because this information is valuable, these credit reporting agencies did their best to yield a reputation for high security. Yet, because it was also known that these entities contained a vast amount of personal information, they were targets for criminals attempting to extract information through phishing, credit card fraud, or identity theft.
Beyond obtaining credit monitoring as a stop-gap measure to prevent harm before joining in or launching a class action against Equifax, there are also credit freezes and fraud alerts. These measures can make it more difficult for a hacker with personal information to take advantage of your good credit. A credit freeze "freezes" your credit where no lender can get access to your credit unless the consumer decides to lift it. Even then, the freeze cannot be undone without a security code. However, this comes with potential costs, as well as added difficulty in applying for services that may need access to your credit. Fraud alerts, in comparison, are generally free, and shift the burden to the creditor. The creditor must attempt to take reasonable measures to verify identity of the individual, hopefully stymieing potential fraud actions.
Ultimately, the story of the Equifax hack contains a simple lesson for any business: Keep updating. The entirety of the hack came from one simple security slip-up, where after becoming aware of an exploit, the installation of a patch was delayed. Because of this error, Equifax lost stock value, a government contract, and become the scorn of public ire.
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