‘Personal Assistant and Watchdog’: How Credit Monitoring Works After a Data Breach

Credit monitoring isn’t just about 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 about earlier this week.

Credit monitoring isn’t just about 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 notified earlier this week.

If your data has been accessed in a breach, it could be exposed to fraudsters, said Jason Heath, an advisor-only certified financial planner at Objective Financial Partners.

“A credit monitoring service is just a way to ensure that if your data is exposed, you can keep control of any fraudulent use or anything out of the ordinary,” he said in an interview.

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

The two main ones credit reporting agencies — 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 watchdog,” TransUnion explains on its website: It monitors your credit report 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 Security 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 one year of free credit monitoring services.

The ticketing platform has sent an email to some customers to warn them that their data may have been compromised in a recent security breach, potentially including their names, contact details and payment card information.

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

“You will receive a notification if there is a change or if there is an inquiry or if something happens with your credit,” he said.

“I think the whole point of a business has been compromised by offering this credit monitoring service.”

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

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

“So a monitoring service will typically proactively monitor these services like Equifax and TransUnion on your behalf, and alert you if they see something that looks unusual and…should be brought to your attention,” he said.

If you’ve been compromised in a data breach and the company involved offers a year of free monitoring, Falzon says you should accept it as it’s usually a premium service.

In a report released earlier this year, TransUnion said more Canadian consumers are signing up for credit monitoring amid a continued increase in fraudulent activity since the start of the COVID-19 pandemic.

A separate TransUnion report released this year found that by 2023, five per cent of all digital transactions originating in Canada were suspected of being fraudulent, while 60 per cent of Canadians reported having recently been the target of 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 created equal, Falzon warns: They don’t all monitor the same sources or services, and they may share your information with third parties for marketing purposes. especially if they are free.

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

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

“So people should definitely take the time to think about whether a service like this could benefit them, given that the number of breaches we’re seeing almost every week continues to increase.”

However, he said credit monitoring doesn’t make you invincible and that you should also practice 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 someone really wants to be safe, they can, for example, change their credit card number and cancel their current number.”

These days, scams come in many forms, Heath said.

“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