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'Personal assistant and a watchdog': How credit monitoring works after a data breach

Credit monitoring isn't just for your credit score — it can also alert you to potential identify theft and fraud if your data has been compromised. Credit cards shown on in Halifax on Thursday, Oct. 6, 2022. THE CANADIAN PRESS/Andrew Vaughan

Credit monitoring isn't just for your credit score — it can also alert you to potential identity theft and fraud if your data has been compromised in a breach, as many Ticketmaster customers were warned earlier this week.

If your data has been accessed as part of a breach, it may be exposed for fraudsters to use, said Jason Heath, an advice-only certified financial planner at Objective Financial Partners.

“A credit-monitoring service is just one way to make sure that if your data does get out there, that you can keep on top of any fraudulent usage or anything out of the ordinary,” he said in an interview.

TransUnion says credit monitoring helps consumers act quickly if there's suspicious activity on their accounts.

Canada's two main credit bureaus — Equifax and TransUnion — as well as many credit card issuers and financial institutions offer credit-monitoring services, according to the Financial Consumer Agency of Canada.

The service is like "a personal assistant and a watchdog," TransUnion says on its website — it monitors your credit file and alerts you to changes such as a new account opened in your name or a late payment reported by a creditor.

Identity thieves can use names, social insurance numbers and sometimes credit card numbers to apply for new credit cards, rent apartments, take out car loans and open new bank accounts, TransUnion says: "Most victims don't realize they've been compromised until they review their credit report or credit card statements, and by then, it may be too late."

This week, Ticketmaster offered Canadian customers affected by a recent security breach a year of free credit-monitoring services.

The ticket sales platform emailed some customers to warn them that their data may have been compromised during a recent security breach, potentially including names, contact information and payment card information.

Credit monitoring is more proactive than simply checking your credit score, explained Heath.

“You would get a notification if there was a change or if there was an application or there was something that happened with regards to your credit,” he said.

“I think that's the whole point of a company that has been compromised offering this credit-monitoring service.”

However, he added that one year may not be enough if your information has been exposed.

In the example of the Ticketmaster breach, there is concern that customers’ financial information may end up in the hands of malicious actors, said Robert Falzon, head of engineering at safety software business Check Point.

“So a monitoring service will typically proactively monitor those services like Equifax and TransUnion on your behalf, and notify you if they see something that seems out of the ordinary and that ... should be brought to your attention," he said.

If you have been compromised in a data breach and the affected company is offering a year of free monitoring, Falzon says you should take it as it's usually a premium service.

In a report earlier this year, TransUnion said more and more Canadian consumers are signing up for credit monitoring amid a continued rise in fraud activity since the onset of the COVID-19 pandemic.

A separate TransUnion report this year found that in 2023, five per cent of all digital transactions originating from Canada were suspected to be fraudulent, while 60 per cent of Canadians said they had recently been targeted by fraud.

The attempts included fraudulent emails, websites, text messages and phone calls, as well as identity theft and stolen credit cards.

Not all credit-monitoring services are alike, warned Falzon: they don’t all monitor the same sources or services, and they may be sharing your information with third parties for marketing purposes, particularly if they’re free.

If you’re looking for a monitoring service, he suggests starting with your financial institution since they have to follow certain rules.

“It is imperative for people to understand that the level of sophistication of many of these attacks has reached a point now where most folks are unable to identify an attack,” said Falzon.

“So people should absolutely spend some time and consider whether a service like this might be beneficial to them, given the fact that the number of breaches that we're seeing on an almost weekly basis continues to elevate.”

However, he said credit monitoring doesn’t make you invincible, and you should also be practicing good “cybersecurity hygiene” by keeping your passwords secure, updating your technology and using security software.

There are other steps you can take to help protect your information whether you’ve been compromised in a breach or not, Heath added.

“If somebody wanted to be really safe, they might go about changing their credit card number, for example, and cancelling their existing number.”

Scams come in many forms these days, said Heath.

“People need to be aware of the types of scams that are out there,” he said.

“It pays to be skeptical.”

This report by The Canadian Press was first published July 10, 2024.

Rosa Saba, The Canadian Press

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