Since the Equifax data breach exposed the personal information of over 145 million Americans (plus a few thousand Canadians and Brits), people who had never heard of a credit freeze before have taken this step to protect their identities. The good news is that a credit freeze can protect you not just from the Equifax breach but from other known or unknown data breaches that may have exposed your personal information. The bad news is that you can’t relax your guard because credit freezes don’t protect you from many common kinds of identity theft.
For a lot of people, the Equifax breach has provided a sudden, unwelcomed education in financial identity risks, but there are actually nine kinds of identity theft that you need to be aware of. Financial identity theft, the kind addressed by credit freezes and fraud alerts, is the most common. (Although a credit freeze only prevents new account fraud, which accounts for only 4 percent of financial identity theft.) Among the other common kinds of identity theft are:
- Medical identity theft, where thieves use your identity to get healthcare or to fraudulently bill for healthcare.
- Tax identity theft, in which thieves file for someone else’s tax refund. This is a big risk with the millions of Social Security numbers (SSNs) exposed in the Equifax breach.
- Driver’s license identity theft, where thieves use stolen driver license numbers to create fake IDs that can be used to cash checks, pass domestic airport security, or simply to drive. The Equifax breach exposed almost 11 million driver’s license numbers.
- Employment identity theft, where people who are not legal U.S. residents or who have a criminal history get a job using fake IDs made with stolen SSNs.
- Child identity theft, in which a child’s SSN is used to falsely claim dependent children or welfare payments from the government or to create fake ID documents. Fortunately, most children don’t have credit reports, so most kids aren’t at risk from the Equifax breach.
A credit freeze won’t protect against any of these kinds of identity theft but we have previously written about other things you can do to protect yourself. Security expert Brian Krebs also suggests setting an alert with a company called ChexSystems that many banks use to verify new account requests. Consumer Reports recommends reviewing your free annual MIB report to track activity on your life, health, disability, and other insurance accounts.
The bottom line is that you need to be on the alert all the time for any sign that someone else is using your identity or trying to get your personal information. And because you can’t monitor everything all the time, you have to also plan how you will recover if someone does steal your identity. It’s not a pleasant prospect, but it is the reality of our digital lives.
This story continues to evolve daily and we’re committed to providing all the information you need to protect you and your family the right way. This article is currently the fifth of five with more coming soon. After you’ve read this article, you can also read: