Banking & Credit

Consumer Alert for Military Families on the Equifax Data Breach

By Rohit Chopra, Senior Fellow

A few days ago, Equifax revealed that a data breach has impacted approximately 143 million American consumers. Names, addresses, Social Security numbers, birth dates, and driver’s license numbers were stolen. Equifax is not proactively informing all consumers whose data was compromised. In addition, hundreds of thousands of consumers also had their credit card numbers exposed.

While this data breach raises major concerns for every impacted consumer, we are particularly concerned about Equifax’s impact on active-duty servicemembers and their families. Since active-duty servicemembers frequently move due to Permanent Change of Station orders, this can make it even harder to quickly learn if they’ve had their identities stolen.

According to public data on consumer complaints, military consumers report identity theft at roughly double the rate of the general public. Stealing sensitive information about members of the military, particularly those deployed from their normal duty station, doesn’t just raise national security concerns. It can also create financial nightmares for servicemembers and their families.

If thieves can open accounts without the servicemember’s knowledge, this can lead to a credit report overflowing with unpaid debts – a sure way to get a security clearance revoked and short circuit a military career if left unresolved.

In addition to tips we have published for all consumers regarding the data breach, we are urging all military families to consider initiating an Active Duty Alert or a Security Freeze with the major credit bureaus.

Active Duty Alert

If you are serving in uniform, the law gives you the right to place an Active Duty Alert on your credit report. This will ensure that lenders take extra steps to verify your identity before opening a new account in your name.

The alert lasts for one year and is renewable. Your name will also be removed from pre-screened offers for credit and insurance products for two years, unless you say that you want them.

Initiating the alert is free. Equifax, Experian, and TransUnion each have a web page where you can request the alert. You don’t need to sign up for this alert with each credit reporting agency; the law requires each company to notify the others.

Importantly, potential lenders can still access your credit report, but they are more likely to be on the lookout for fraud.

Security Freeze

Since military families are often closely targeted by criminals, we urge you to consider a security freeze, which will lock down your credit report. If you put a freeze on your credit file, prospective lenders, landlords, or employers won’t be able to access your credit report. If you – or a criminal – applies for a loan with your information, the lender will deny the application since they won’t be able to pull your credit report. You can lift your security freeze if you need to apply for credit.

Unfortunately, this is not free for everyone. While the credit reporting agencies have stated that they hope to make security freezes widely available for active-duty servicemembers, they won’t start this process until next year.

Fees are generally capped under state law. We encourage states to adopt similar policies to Illinois, which bans security freeze placement and lift fees for active-duty servicemembers.

You can find Equifax’s fees by state here. Equifax has not made any public commitments on waiving security freeze fees for consumers impacted by this massive breach.

Unlike the Active Duty Alert, you’ll need to place a freeze with each individual credit reporting agency.

For more information about how servicemembers and their families can protect themselves against credit reporting errors and identity theft, visit this guide from the Consumer Financial Protection Bureau’s Office of Servicemember Affairs.

Got more questions? Tweet us @ConsumerFed.

Rohit Chopra is a Senior Fellow at the Consumer Federation of America and one of CFA’s experts on financial issues facing active-duty servicemembers, veterans, survivors, and their families.