Generally speaking, the Equifax breach increases the risks of fraud because Equifax is one of the three companies in this country that sits atop virtually all credit issuing processes. If someone wants to open a bank account, take out a loan, or get a credit card, those requests filter up to companies like Equifax, where a person is matched to a record of their personal and financial history based on a number of inputs, like name, social security number, address, and list of other accounts. Because all of the information used to identify people for credit and identity-matching purposes has now been stolen, it’s far easier for someone to impersonate a random individual with far more success than it would have been before. Especially with online applications for loans and credit cards, it’s quite easy to dump in someone else’s stolen personal information, get approved because that information is all legit and confirmed by an existing credit rating agency, and have a card shipped to your address. Then you get access to the line of credit and the other person gets all of the consequences when you inevitably don’t pay the bill.
Thank you for the explanation.
There are still a few things I do not quite understand. We also have credit rating agencies in Europe, usually just one per country (I think). Potentially, this would be a bigger problem, but I am not aware of massive identity theft. Maybe out banks are less lax when issuing credit? I think here credit will not be issued without at least checking identification. I also think it takes at least a few days, maybe the bank checks during that time?
I am not very knowledgeable about credit, as I don’t use it myself, so take what I say with caution.
Long before Cory Bruce Sterling wrote about offshore pirate databases in Islands in the Net, 1988, and William Gibson about data theft “Cowboys” in 1984’s Neuromancer. Everyone knew this was coming, but no one wanted to be bothered.
My college ID# was my SS. ITS NOT FUCKING SECRET!!!
With all seriousness, Equifax is not the only company providing a credit checking service. None of the competition can possibly be worse – given that Equifax is that bad – so why use Equifax.
Also, I do believe that any credit card charges resulting from the hack would be on Equifax’s customers; get an improper charge, dispute it, lender pays not you.
Say - there’s a thought! I’ll just open my own low-cost credit scoring service, using the Equifax data. Who ever said externalities have to hurt the little guy?
- Any bank is likely to use all three bureaus for any significant credit checking activity, and IIRC in terms of credit scores will usually choose the middle one for setting rates and approving/declining.
- “Dispute it” is not always a trivial operation, unfortunately. There can be periods of “Sorry, the bank has to freeze this account while we investigate, so you won’t be able to deposit your paycheck or pay your bills for a few months.” There can be court (or arbitration) costs, lost days of work, hours spent gathering documents, sleazy debt collectors… It’s a giant PITA for the victim and essentially no cost to Equifax.
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