Indiana Attorney General Urges Credit Freeze

 

FOR IMMEDIATE RELEASE: Friday, October 2, 2015

Zoeller urges credit freeze in wake of Experian/T-Mobile data breach

Experian, housing T-Mobile customer data, hacked; 15 million affected

INDIANAPOLIS, Ind. – An estimated 15 million T-Mobile customers who applied for credit through Experian are at risk of having their data compromised, and Hoosiers who are affected should register for a credit freeze as a precautionary measure, Indiana Attorney General Greg Zoeller said.

The information was obtained when an unauthorized party accessed T-Mobile data housed in an Experian server. Affected customers are those who applied for T-Mobile USA postpaid services between September 1, 2013 and September 16, 2015.  Information that was breached includes customers’ names, addresses, social security numbers, dates of birth, identification numbers (typically a driver’s license number, military ID, or passport number) and additional information used in T-Mobile’s own credit assessment. According to Experian, its consumer credit database was not accessed in this incident.

The Indiana Attorney General’s Office is investigating the breach and monitoring the situation to ensure that consumers are properly notified, and can assist any consumers who fall victim to identity theft or fraud. It is unknown who committed the data breach, but the AG’s Office will work with its federal counterparts in the investigation.

“This latest data breach is yet another example of why it is so important for everyone to proactively register for a credit freeze to protect themselves from identity theft,” Zoeller said.  “At this point it's safe to assume that everyone in our state has been affected by one of the many data breaches, no one is immune to this and if you don’t take the initiative to protect your credit, the consequences could be very costly and have a long-term financial impact.”

Protect against ID theft

Zoeller urges consumers who may have been impacted in this data breach or any other breach to take the following immediate steps to guard against identity theft:

• Sign up for a free credit freeze with the three credit bureaus – TransUnion, Equifax and Experian. Registering for a credit freeze will prevent a fraudster from taking out a line of credit in your name without your permission; and you can easily lift the credit freeze at any time if you do wish to apply for new credit or a loan.  The free credit freeze sign-up page can be found at www.IndianaConsumer.com/idtheft.
• Closely monitor financial statements for any unusual activity.
• Review and monitor your credit report to check for inaccuracies. A free credit report can be requested from each of the credit bureaus once a year through www.AnnualCreditReport.com.

Additionally, Experian and T-Mobile will offer affected consumers two years of credit monitoring and identity protection services for compromised customers at no cost. Credit monitoring alerts consumers to fraud after the fact, so it’s always best to also have the credit freeze already in place to deter fraud, in addition to credit monitoring. Visit www.ProtectMyID.com/SecurityIncident or call Experian at (866)-369-0422 for more information about its credit monitoring.

If consumers already have credit monitoring in place from a previous breach, they might consider adding the Experian/T-Mobile monitoring if it would provide a longer coverage period. Consumers should be aware when the free time period ends on their credit monitoring, especially if they would like to cancel, because they will likely be encouraged to purchase the service long-term.

Zoeller said the free credit freeze is the best protection against fraud and identity theft, though monitoring can be helpful in identifying fraud.

Everyone, regardless of if you believe your data has been compromised, can take the above steps to protect against ID theft.

Red flags of ID theft

Certain red flags can indicate that identity theft may have occurred, including:

• Incorrect personal information on your credit report such as a social security number, address, name, initials or employers.
• New accounts being opened in your name that you did not authorize or receiving credit cards that you did not apply for.
• Missing bills. Often identity thieves will change your billing address to make their illicit activities look more legitimate.
• Any unexplained debits to your accounts.
• Being denied credit or only offered high interest rates on credit lines for reasons unknown to you.
• Calls from debt collectors about purchases you did not make.

Report ID theft

If unusual activity is detected and you believe you are a victim of identity theft, follow the below steps:

• Report fraud to the police and file a complaint with the AG’s Office at www.IndianaConsumer.com or by calling 800-382-5516.
• Place fraud alerts on your credits reports by contacting one of the three credit agencies: TransUnion, Experian or Equifax.
• File a petition in court asking the judge to issue a court order declaring you a victim of identity theft. That order can help clear up fraudulent activity.

Under Indiana’s Disclosure of Security Breach law, businesses with Indiana customers are required to inform customers and the AG’s Office about security breaches that have placed personal information in jeopardy. The AG’s Office investigates data breaches to determine if customers were properly notified of the breach and if the entity had appropriate safeguards in place to protect customers’ data.

More information about the T-Mobile/Experian breach is posted on Experian’s website here: http://www.experian.com/data-breach/t-mobilefacts.html. Experian has said they are notifying all individuals who may have been affected.

In 2014, nearly 400 data breaches were reported to the Indiana Attorney General’s Office. In 2015 thus far, 375 data breaches have been reported. In 2015, about 924 complaints about identity theft have been reported to the AG’s Office, and 1,300 complaints were reported in 2014.

More identity theft protection tips and information on the AG’s Identity Theft Unit can be found at www.IndianaConsumer.com/idtheft.

Session 8 Credit Reporting and Scoring

 

My online students are to read about credit reporting, watch a short video, and then participate in a discussion board about what each thinks are the two most important items displayed on a credit report, and why they are important.  Below is what I posted for them.  Mortgage and auto lenders – please tell about creative ways that you qualify an applicant who has a thin credit file.

Session 8 Credit Reporting and Scoring

Some of you are working ahead, and there have already been questions about credit reporting and scoring.  These are complex topics that we could likely develop an entire course around!

Lenders do use credit reports and/or scores to make the decision whether to lend and if so, at what rates.  Today, prospective landlords, insurance companies, and even employers may make decisions about us based on consumer reports.  Fair or unfair, right or wrong, that’s the way it is for now.

Credit reports are indeed important in our financial lives, and I certainly want to be sure that the information on mine is accurate.  Over the years I’ve had many errors on my credit reports but have never experienced difficulty getting them corrected.  Others have not been so fortunate.  Some of you may have already watched the eye-opening CBS 20/20 segment from February 2013, “40 Million Mistakes: Is your credit report accurate?” (see earlier announcement).

Allen Wyatt in the 2008 “Understanding Your Credit Report” video gives the credit score a much loftier status than I do (the “all-important FICO score”).  Moreover, he states, “The pivotal part of your whole credit report is your FICO score; it should be prominently displayed in any credit report you review.”

But your FICO score is not even a part of your credit report.  It is a three-digit score based upon information from a report.

“Credit bureaus use many different scoring models, even within the same credit bureau. Each bureau can use dozens of different credit score models based on the requirements of different lenders,” Credit Karma explains.  “Each credit score model has a slightly different formula that takes into account over 200 different factors of your credit report.”  The company also notes, “Because there are hundreds of credit scores that measure many different probabilities, consumers should not be overly concerned with the type of score or even their number.”

The Fair Isaac Corporation (the "FICO" people) tells us that 65% of a credit score is related to payment history and amounts owed.  So as it turns out, some of the things that can increase your score also make financial sense!

We will talk more about carelessness, ID theft and fraud later in the course, and Credit Karma may come up with regard to carelessness.  If you’d like an estimated credit score, use FICO’s credit score estimator or another one for which you do not disclose identity information.

There are fraudulent credit repair companies that are perfectly willing to pull you into legal hot water, provided you send them a few bucks!  In fact, they can do nothing for you – legally anyhow – that you cannot do for yourself.  For more information about this, see the FTC's "Credit Repair: How to Help Yourself".

When consumers try to manipulate scores, they often end up worse off than before. I would certainly not borrow money merely to try to improve a credit score. Focus first on making sound financial decisions.  That is, pay bills on time and borrow no more than is needed – even for college.  If you already have a solid and favorable credit history, just keep up the good work and a reasonable score will likely follow.

For a FICO score to be calculated, a credit report must contain these minimum requirements:

• At least one account that has been open for six months or more
• At least one undisputed account that has been reported to the credit bureau within the past six months
• No indication of deceased on the credit report

Rebuilding credit after bankruptcy can actually be easier than establishing it in the first place, especially if there is such as a mortgage or auto loan that was reaffirmed.  But neither building nor rebuilding happens quickly; it takes patience, persistence, and diligence.

Three years ago, American Banker Magazine mentioned a relatively new credit reporting agency, eCredable, in it’s "10 Big Ideas for Banking in 2013".  I have become “virtually” acquainted with the CEO, and the service does appear that it may be helpful to consumers who are trying to rebuild and those who are just starting out.  It looks like it may be especially useful for those who handle their money responsibly but have just never been in the financial mainstream.  This segment of the population is increasingly important to lenders.

One of the “big three” consumer reporting agencies, Experian, now reports rental payment and collections, but according to the Consumer Financial Protection Bureau, “Experian’s data currently only covers a small portion of rental properties.”

If you REALLY want to learn more about consumer reports, check out the January 2015 Consumer Financial Protection Bureau’s list of consumer reporting agencies.

Below is what I had posted about the 60 Minutes report:

For those of you who are interested, here are the 60 Minutes links:

• 40 Million Mistakes: Is your credit report accurate?  February 10, 2013 (12:20)
• The ONE thing to know about your credit report August 25, 2013, (4:04)
• How to dispute errors on your report August 25, 2013 (1:43)
• How mistakes can harm your credit August 25, 2013 (2:11)

Each morning following this February report I was on the edge of my chair for news of action and was repeatedly disappointed.  Then on May 7, 2013, the U.S. Senate Committee on Commerce, Science, and Transportation, Subcommittee on Consumer Protection, Product Safety, and Insurance (yes, that’s a mouthful) held a hearing, Credit Reports: What Accuracy and Errors Mean for Consumers.

Fast forward to March of 2015, when the three major credit rating agencies reached an agreement with New York Attorney General Eric Schneiderman to change the way they handle errors on credit reports. and the New York Times reported, TransUnion, Equifax and Experian Agree to Overhaul Credit Reporting Practices.

Under the reforms, consumers can initiate a formal dispute to challenge inaccurate information and agencies must use trained employees to investigate the complaints.  Hear the 3-minute NPR audio here.  In April, FICO reports, "Why the upcoming credit bureau changes are a big deal for consumers"  and in August, Credit.com reported, "How Your Credit Score Could Rise Soon without You Lifting a Finger".

Let’s watch to see what comes of all of this.