A Small Price to Pay

Five years ago there was a data breach at the very large financial institution that managed my employer's retirement plans. I signed up for the three-year free credit monitoring service, and every monthly report was clean.

Since then there have been data breaches galore at credit-card, insurance, health, and retail companies, some of whom we regularly deal with. Offers of free credit-monitoring provide scant comfort, since it is very likely that our social security numbers, dates of birth, and other personal information are known to the bad guys.

This week we paid $10 each for a credit freeze at the three major credit-reporting companies:

Equifax
Experian
TransUnion

A credit freeze

lets you restrict access to your credit report, which in turn makes it more difficult for identity thieves to open new accounts in your name.

A credit freeze does not address the problem of stolen credit cards, but cc theft is less of a concern because losses are capped at $50 per card. A credit freeze may be a nuisance if one is in the market for new financing (home mortgage, credit cards, auto leases, etc.), since delays may occur in lifting the freeze, and each lift costs $10. However, we're not expecting to add credit in the next couple of years.

An identity thief could open new accounts and steal many thousands of dollars. It can take years to sort everything out and clear our names. Paranoid? Perhaps, but $30 is a small price to pay to sleep a little easier. © 2015 Stephen Yuen