In an era of rampant cyber threats, protecting yourself has never been more crucial. Over the past five years, hackers have exposed the personal information of millions, leaving them vulnerable to identity theft and financial fraud. Freezing your credit report can safeguard your financial health. Here’s why you should consider it.
Data breaches are becoming more common
Data breaches have become alarmingly common, affecting organizations across various sectors. In 2021, hackers compromised T-Mobile’s data, including Social Security numbers and driver’s license information of around 47 million current and former customers (TechCrunch). In June 2022, Flagstar Bank disclosed that 1.5 million customers had their sensitive information exposed (Tech.co). These incidents underscore the growing threat of cyberattacks and the sheer size of affected people.
The financial sector is particularly vulnerable to cyberattacks. A ransomware attack on LoanDepot in January 2021 exposed the personal data of 17 million customers (TechCrunch). LoanDepot stated the “customer data includes names, dates of birth, email and postal addresses, financial account numbers, and phone numbers“. Ouch. Such breaches can lead to severe financial and reputational damage for both institutions and individuals.
Healthcare organizations are also targeted, unfortunately. In March 2022, hackers breached Shields Health Care Group, affecting 2 million people and compromising sensitive information that even included medical treatment details (Tech.co). This type of data is particularly valuable on the black market, making healthcare data breaches especially concerning. Freezing your credit can help mitigate the risk of your medical information being used for fraudulent purposes.
Even digital and credit platforms are not immune
In June 2022, an employee misused access at Customer.io, the email vender for a company called OpenSea. OpenSea is a leading non-fungible token (NFT) marketplace. I might cover NFTs another time. The point is that this employee, someone trusted with access, downloaded and shared email addresses with an unauthorized party (CyberNews).
Finally, the notorious Equifax breach of 2017 exposed the personal information of 148 million Americans, illustrating the vulnerabilities within credit reporting agencies themselves (Tech.co). The long-lasting impact of this breach has led many to consider freezing their credit reports as a necessary precaution to prevent identity theft.
The cost of inaction
Failing to take preventive measures can lead to severe consequences. Victims of identity theft often face long, arduous processes to restore their financial integrity. By freezing your credit report, you can avoid the potential nightmare of dealing with fraudulent accounts and unauthorized loans. Remember, free credit monitoring that generally comes with these breaches is not the same as freezing your credit.
In summary
Freezing your credit report provides significant protection against identity theft and financial fraud. This simple step prevents new creditors from accessing your credit report without your permission, making it harder for criminals to use your stolen information. Given the increasing frequency and severity of data breaches, freezing your credit is a prudent measure to safeguard your financial future. It really is not a matter of if your data will be in a breach, but when.
The website Investopedia has a fantastic article on how to freeze and unfreeze your credit. Check it out.