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Hacked Much?

Dan Smith - Monday, October 23, 2017

Secrets of the past! Who does not wish to keep the past locked in a cage like a ferocious beast? The rich are sleepless for fear of thieves. The respectable have to guard their reputations in the same way[1].  ~ Munshi Premchand

The great thieves lead away the little thief[2]. ~ Diogenes

You don’t get rich in politics unless you’re a crook[3]. ~ Harry S. Truman

I had several folks this month ask what I thought about the recent hack of over 140 million accounts at Equifax, the oldest of the three largest credit bureaus in the country[4]. And as usual, it turns out I have lots of thoughts about the topic. My first thought has to do will the Gramm-Leach-Bliley Act of 1978[5]. You know, the one where we were all guaranteed that our financial privacy would be protected. I seem to recall there being a “Safeguards Rule” that required financial institutions to, “ensure the security and confidentiality of this type of information[6].”

So when you consider this particular hack, I guess we can only assume that their standards of “safeguard” were so low, that those nasty 13 year old Russians must have been responsible again? LOL!

It also reminded me of a time when I worked for Wells Fargo Home Loans (2004 – 2006), out of their bank branch in Golden. I remember the day I sat with a banker to open my obligatory checking account - as every good employee was told to do. I recall standing behind her shoulder sipping coffee, and noticing that their operating system was MS-DOS. At the instant it sunk in that they used a system which originated in 1981[7], I very nearly spewed my coffee all over the banker’s lap. I quickly snuck back to my cell in the cubical farm and (in hushed tones) called our IT department to report the issue. What I heard next astounded me and obviously left the permanent mental scar you see on display here. I was told that the company used MS-DOS because they believed that no hackers would suspect a major company of still using it – so we would all be safe basically, by hiding in plain sight on the internet! Consequently, besides creating 1.4 million fake accounts using their current clients’ personal information[8] – you can imagine my absolute lack of shock when I read this July in the NY Times, that a simple unrelated subpoena to Wells had landed the disclosure of 50,000 of Wells Fargo’s wealthiest clients’ personal information in response[9]. My guess - Go to the Wells Fargo location nearest you and look over the shoulder of your own banker….just saying!

And for those of you who somehow believe you have never been hacked, consider this. If you subtract the portion of the US population that in under 18 years of age, or otherwise doesn’t use credit, 143 million Equifax records basically represents the entire US population of working adults. And as the guys at the National Real Estate Post point out, this is just one in a very long list of historic hacks: 56 million credit card accounts hacked at Home Depot[10]; 70 million Target accounts[11]; Chase’s 76 million accounts[12]; health insurer Anthem 80 million accounts (so now they know your blood type too)[13]; Ebay 145 million accounts[14]; MasterCard/VISA 160 million accounts[15].

Now I can hear you asking yourself, “What can I do to fight back and protect myself?” The first thing to do is to check your credit. All three credit bureaus have a one word domain name., and (although you may see the irony of checking in with the latter). By law, you have the right to one free credit report a year. Next, pay very close attention to your credit card statements over the next few months. Much of the theft that will come from this breach will be “micro” amounts of charges flowing out on a regular basis – so as to go unnoticed. You may even want to place “fraud alerts” and/or “credit freezes” for your records at all three bureaus. The only drawbacks with this approach would be to those of you who enjoy spontaneously opening new accounts at department stores, or those who don’t want to deal with the hassle of lifting the freezes when you go to purchase a car or a home. Lastly, you may want to consider signing up with a credit monitoring service. I have had LifeLock for years and can certainly endorse their services, but there are dozens of similar companies to choose from. With these types of services, you will get a notice when anyone tries to open an account in your name and/or using your social security number. Meanwhile, so much for ensuring “the security and confidentiality of this type of information.”

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