7 Crucial Actions Consumers Should Take After A Data Breach

Aaron Fransen profile photo

Aaron Fransen, CFP®, CHS, MFA™

CERTIFIED FINANCIAL PLANNER® professional
Fransen Financial / Worldsource Financial Management Inc.
Office : 604-531-0022

Data breaches and cybersecurity attacks are becoming more and more common. According to a report by the Identity Theft Resource Center, more than one billion people were affected by data breaches in the second quarter of 2024, marking a 1,073% increase compared to the same period in 2023. Incidents like the April 2024 AT&T attack, and the most recently reported National Public Data breach, are just some of the high-profile examples that emphasize the need for consumers to protect their personal information. If you think you may have been impacted, take the following steps to safeguard your identity, protect your finances , and prevent further issues.

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Isometric illustration of a hacking attack or security breach. 3D rendering

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1. Stay Informed And Take Action

Staying informed and taking quick action is crucial after a breach. Companies are legally required to notify consumers if their information has been compromised, so look for any official communication. These notifications should provide details about the breach, including when it occurred, how it happened, and what specific information was exposed.

“It’s the awareness that the data breach happened. You get a notice and you pay attention to that notice. You don’t throw it away, and then beyond taking action quickly, make sure you think about layers of protection,” advises Michael Bruemmer, vice president of the Data Breach Resolution Group and Consumer Protection at Experian. “And if you don’t take quick action, the hackers may sneak in before you’ve got the door,” he adds.

2. Monitor Your Credit

Keep a close eye on your credit report to spot any red flags, like accounts you did not open or inquiries you did not make. Several major service providers, such as Experian, Equifax, and TransUnion, offer credit monitoring and identity theft protection services to help you stay on top of the situation.

You may also consider placing a fraud alert on your credit file. This will require creditors to take extra steps to verify your identity before opening new accounts. For even greater security, you can opt for a credit freeze, which locks down your credit file and prevents new accounts from being opened without your explicit permission.

3. Update Your Passwords

Immediately change the passwords for any affected accounts. Ensure that you use a unique combination of small and capital letters, numbers, and special characters. Never use “1234567,” “password,” or your birthdate. You must also have different passwords for each account.

Bruemmer recommends using a password manager for secure storage and simplifying the process. “You only have to remember one password to get into your vault. And most importantly, they will auto-generate a long and complex password that you don’t have to create yourself, and it will always force you never to reuse a password,” Bruemmer says.

4. Watch for Phishing Attempts

After a data breach, it is important to be alert for phishing scams, which often increase after such events. Never answer unsolicited emails, texts, or phone calls, especially from unknown senders, that request personal information, as these may be attempts to gather more data or trick you into revealing sensitive details.

Be wary of messages that seem urgent or unexpected, as they might be designed to exploit your concern about the breach. Always verify the sender’s identity before clicking on any links or downloading attachments from unknown sources to avoid further risks to your information.

5. Enhance Your Online Security

Review the security of your financial and other accounts, especially those that contain sensitive information. For added security, enable two-factor authentication whenever possible. This requires a second form of verification, such as a code sent to your phone or via email, in addition to your password.

Be careful about what you share on social media. Oversharing can provide hackers with more information to exploit. Avoid posting details like your home address, phone number, or birthdate online.

6. Consider Identity Theft Protection

Professional services can provide an extra layer of security, offering credit monitoring, identity theft resolution, and insurance coverage for potential losses. For example, many services feature access to fraud resolution agents who assist in recovering from identity theft.

Additionally, the Federal Trade Commission offers free resources and advice on preventing identity theft and dealing with its aftermath. You might also explore services from nonprofit organizations like the Identity Theft Resource Center, which provide comprehensive identity protection and recovery support.

7. Report Suspicious Activity

Report any unauthorized activity on your accounts to your bank, credit card issuer, or the relevant institution immediately to minimize potential damage. Acting quickly can prevent further fraudulent transactions.

Along with notifying your financial institutions, file a police report to document the crime, especially if identity theft is involved. Additionally, report the identity theft to the FTC to create an official record. This step is crucial for initiating the process of protecting your credit and clearing your name.

Best Practices And Preventive Measures

While it is important to know how to respond to a data breach, it is just as crucial to take steps to protect yourself ahead of time. Simple actions like regularly updating your passwords, setting up two-factor authentication, and being mindful of what personal information you share online can make a big difference.

You must also beware of public wifi and not use them as much as possible. The security risk is much to great compared to the savings you accrue from using free internet access.

You should also make sure that your accounts are not all linked together. For example, your credit card should be paid from an account separate from your mortgage payments or investment accounts. This will help prevent hackers from getting one entry point to your accounts and enhances your overall security.

Final Thoughts

In the aftermath of a data breach, timely action is your best defense. Stay informed, monitor your accounts, update passwords, and watch for phishing attempts. Use available resources like identity theft protection, and report any suspicious activity right away. You should also take proactive measures to enhance your security. These practical steps are key to protecting your personal information and reducing the impact of a breach on your finances and overall security.

By True Tamplin, Contributor

© 2024 Forbes Media LLC. All Rights Reserved

This Forbes article was legally licensed through AdvisorStream.

Aaron Fransen profile photo

Aaron Fransen, CFP®, CHS, MFA™

CERTIFIED FINANCIAL PLANNER® professional
Fransen Financial / Worldsource Financial Management Inc.
Office : 604-531-0022