The Equifax Hack

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In the last week and a half, we have had news of another North Korean missile launch, protests in St. Louis, President Trump tweeting about anything and a terrorist attack in Britain.  The news item that probably affects more Americans directly than any of those is the news of the security breach at Equifax.

I have been contacted by several clients asking Are they effected? What is the threat? and What to do?  This hopefully answers some of your questions and gives you a path for the way forward.

Where we are.

Last week Equifax announced that personal data of approximately 143 million Americans as of this writing had been stolen.  Equifax has begun some paltry attempts to begin recovering.  They early on put up a website to discover if your information had been compromised.  The website was not well supported and crashed multiple times.  They also offered an 800 number to call in to.  Numerous people report calling in and receiving incorrect advice from untrained call center workers, if they were able to get an answer at all.  Early on Equifax offered a free year of credit monitoring but part of signing up for it was waiving your right to sue for damages.  The stipulation has since been removed but the credit monitoring service is largely a symbolic gesture.  Government investigations have been promised, some of Equifax’s corporate leadership has “retired”.  Recent reports suggest that some Equifax executives had sold stock in the interim between discovering the leak and announcing that leak to the public.  Equifax reports that none of these stock sales were in response to the leak.

The impact.

The information hacked from Equifax opens your whole life to identity theft.  Equifax reports that Social Security numbers, account numbers, names, addresses, birth dates and driver’s license information for some states.  The bulk of this information is considered “Evergreen” in that this basic information is something that is a part of you and not really something you can just change.  Most of the recent hacks, such as the recent Home Depot hack or Target hack involves information which has a very defined life time.  Generally, these hacks involved account numbers of credit cards.  The crooks had to use this information in a certain amount of time before the account numbers changed. The information hacked can be placed in an electronic vault somewhere and 5, 10 or 15 years down the road pulled out to be used to steal your identity.  It can also be used for multiple attacks of your identity since it includes information that is the base of your financial identity.

The Threat.

This hack threatens your financial life far more than any hack before.  The loss of your basic data which is evergreen opens you up to identity theft for the rest of your life.  The information hacked will allow crooks to open accounts in your name, get different forms of credit in your name and take over your credit making it very hard for you to access your credit and legitimately repair it if needed so that you can access your credit for your own legitimate purposes.  Some of the lesser recognized methods this information could be used is to file a false tax return in your name getting your tax refund or filing for Social Security and Medicare benefits in your name.  Probably the only light in this whole situation is that children who have no credit file are not affected at this point.

Your roadmap to protect yourself.

Protecting yourself at this point is less about preventing your information from being stolen and more about limiting the usefulness of that information.  Equifax has offered a free year of credit monitoring after which you would have to pay to continue that service.  That’s nice of them to provide a free year only considering the information leaked leaves you vulnerable to identity theft for the remainder of your life.  I personally have skipped the free offer from Equifax.  Credit monitoring is an ineffective service provided by the credit bureaus.  It would be like having an alarm on your home, which goes off 24hrs after the criminals have left your home with your possessions.  At this point I would take 3 steps to prevent the use of your personal information to steal your identity.

Pull your credit report.

At annualcreditreport.com you are legally allowed to receive your credit report for free from the 3 big credit agencies annually.  I would pull 1 of your reports now, ignoring all the paid offers by the credit agencies.  Review the report and keep it, then set a reminder for 4 months for now.  I would pull a report from the 2nd credit agency at that point.  Compare the two for changes and any changes that you don’t recognize research and confirm if they are fraudulent or not.  Then 4 months later I would pull a credit report from the 3rd agency.  In this way every 4 months or so you are pulling 1 credit report to look for potential trouble spots.

Register for free monitoring.

Next, I would register for free credit monitoring at creditkarma.com.  This website will allow you free access to your credit score and will monitor your credit report for changes and send you alerts for free.  There are other paid services that offer this but credit karma is a free, well reviewed product that meets the need.

Take the most critical step to protect yourself. 

After completing the first two steps the third action is the most critical to protect your identity and make it virtually useless for identity thieves.  It is called a “Credit Freeze”.  You must contact each individual credit agency.  Each credit agency will charge a fee to freeze your credit which is different for each state.  This credit freeze will prevent the opening of new credit.  That is the downside of this protection.  When you are legitimately trying to apply for credit you will have to “Unfreeze” your credit.  Each credit agency does it a little bit differently but essentially when you freeze your credit you have some sort of PIN number set up that is personal to you.  The PIN allows you to quickly unfreeze your credit for your use.  Should you lose the pin each credit agency has a process to get access to your credit report. 

The aftermath.

Because of incompetence Equifax has left about 1 of every 2 Americans and foreigners with American credit reports vulnerable to identity theft for the remainder of their life.  Congressional hearings have been promised.  Legal action is likely. 

Scott Vance is a fee-only planner and Enrolled Agent at Taxvanta serving the Raleigh, N.C. area. He recently retired from the Army. His background allows him to uniquely understand issues faced by military personnel, but he works with all clients. He is currently a candidate for CFP® certification and seeks to provide objective, commission free advice to clients. Vance was born and raised in Pennsylvania. He is married to Amy. They have a son, Brandon. They enjoy skiing and kayaking. He can be reached by email at scott@taxvanta.com

Article Disclaimer: This article was written by a valued blog contributor but Triangle Real Estate Investors Association does not give legal, tax, economic, or investment advice. TREIA disclaims all liability for the action or inaction taken or not taken as a result of communications from or to its members, officers, directors, employees and contractors. Each person should consult their own counsel, accountant and other advisors as to legal, tax, economic, investment, and related matters concerning Real Estate and other investments.


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How to Find Hidden Real Estate Bargains Online

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The internet is full of hidden bargains!  As many as 24% of the real estate market is composed of self-sellers, and you have a 10-23%  chance of finding a property well below market value depending on the seller’s intentions.

Kinds of Properties

There are so many different types of property, its almost like a smorgasbord. It can be a fixer-upper,  foreclosure or just motivated sellers. With a few online strategies and tools, you can tap into the hidden bargains available online. Investors who use the internet wisely can find 100s of real estate deals monthly.

Use the Internet

Why shy away from internet marketing, when there is massive potential and you can get more deals faster than your competitors. Many experienced real estate investors have turned to the internet to find as many real estate deals they can without leaving the office.

Virtual Investing  can become an alternative to building a local real estate investment business in your area. If the market  is not performing in your area, its very easy to use the internet to your advantage  and win over any competition. Imagine what you could do with software that can handle the real estate deal making the process for you?

Make Deals Faster

Imagine that you are finally taking control of your marketing and finding hidden bargains in record time Imagine that you can have systems and software constantly monitoring the internet alerting you for great deals.  Imagine then  that there is software that can help you generate offers via email and fax and follow up agents by SMS text.   Imagine having a full-time income while working only 2 hours per week!

There are many  people already out there using the innovative strategies and technologies that area available to make your more successful faster.  In fact, real estate bargains are all over the internet and you can’t find them all on your own. The right tools can turn any investor’s business into a full-fledged spin to generate massive income. Finding the properties is only one step to making deals faster.

The world of real estate investing will continue to rise for experienced investors. Some of the best are taking over the market with new developments available through consistent marketing. In fact, they’re learning the ropes by paying attention to pros. Hidden real estate bargains will not make it to the list if you can get to the sellers first. Do you want to wait with the others or do you want to steer ahead focused on achieving your goals? You know what you need to do; all you have to do is make that decision today. Change the direction of your business and come to our presentation and Saturday training here is how you can take advantage

Written By: Duncan Wierman


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Is there Another Crash Coming?

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The simple answer is yes of course there is.  There have always been buildups, crashes and recoveries.  That is just the way things work.  The real questions are when is the next big crash coming, what you do about it and how do you prepare for it.

I know people are freaking out right now, but staying informed and objective at this point will help keep your sanity. 

As I am writing this, an email thread from my Lifeonaire Titanium group started circling about just this exact same topic.  Some of them are taking advantage of the current market conditions because they have a great marketing machine running that is supplying them with good deals and because of the lack of inventory, they are making higher profits than they would have in a normal market.  Others are starting to panic and preparing for dooms day.

Here is my quick response to them:

Everything we are seeing right now is equivalent to 2003-2005 before the big crash in 2008.  While there are similarities to that time frame, there are also huge differences.  As Steve stated, there are no NINJA loans right now.  But they may be coming back.  Lack of inventory was not the driving force back in 2003-2005.  NINJA loans and other no qualifying loans were the main driving force. 

My short version is this:
If you look at the historical price index from case shiller which is adjusted from inflation, we are not seeing the same price increases as we did the last time.  Below is a screen shot of my local market that I just did for our meeting last week.  As you will see, we are at a 3% appreciation over the last 27 years.  Historically right were we should be.  The big thing to keep an eye on right now is how the lack of inventory affects the markets.

I’m not saying everything is ok, but I am saying don’t panic, just yet. 

Here is the rest of the story:
in 2002 I started asking the same questions that many people are asking now.

  • How can wholesalers be asking so much for deals, the numbers don’t work?
  • Where is all the inventory?
  • How do you find good deals?
  • Why did the buyers offer me so much more than I expected the market would bear?

Back then, those question caused me to pull back and stop buying and just maintain what I had, which at the time was more than enough to retire, if the market didn’t crash.  So I didn’t buy back then because I just couldn’t believe that property values could keep going up like that, but they did for another 3-4 years.  By the time I was comfortable with the new market, it was to late.  Yes I did get back in, but by then the market was starting to fight back and another year later property values peaked and started softening.  Opps, I should have gotten in earlier.

There were market indicators that if I was paying attention to them at the time and more importantly, could understand them, I would have been ok.  There were other investors who did understand the key market indicators and were paying attention to them very carefully.  I didn’t understand it back then, but I do now.  First of all, most of the successful investors during the last crash, were the same ones that lost everything in the previous crash back in the late 80’s.

I plan on being them this time around.  I plan on taking advantage of this market right now and when I see the key indicators start to turn, I will get out, or at least change my focus and do something different.

Key indicators:

  1. Interest Rates: If they go up to high, that will affect Key indicator Number 2.
     
  2. Housing Affordability Index: When that gets down to the 2004 levels, I am out.  Based on this chart, the 2005 – 2007 levels indicated that people were paying as much as they possibly could afford.  They are not there yet.

     
  3. Months Supply of Inventory: We are currently under 2 months, based on the current market conditions, if I see that get above 4 and if key indicators 1 & 2 are moving in the wrong direction, it’s time to do something different.

 


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