Why credit monitoring will not help you after a data breach [Chicago Tribune :: ]
(Chicago Tribune (IL) Via Acquire Media NewsEdge) Aug. 15--The latest data breach involving credit and debit cards, this time at Jewel-Osco and sister supermarkets, has yet another retailer advising customers to check their credit reports and offering free credit monitoring.
Problem is, that's bad advice. Payment card breaches have nothing to do with credit reports.
It's like losing your keys in the street at night and searching for them under the lamppost a block away because the light is better there. Searching is easier but it won't help you solve the problem.
"It's a huge waste of time and can provide a false sense of security," said John Ulzheimer, credit expert with CreditSesame.com. "In fact, it's akin to the retailer telling their customers to bug off."
On Friday, AB Acquisition, parent of Jewel-Osco, Albertsons, ACME Markets, Shaw's and Star Markets, said its computers containing customer credit and debit card information sustained an "unlawful intrusion."
It said it had not determined whether cardholder data was stolen or whether thieves misused data. The breach is related to one with stores operated by Supervalu Inc., which continues to provide information-technology services to AB Acquisition following its purchase of Jewel and other stores from Supervalu last year.
Unauthorized access may have started in stores, including Jewel, on June 22 and ended July 17 in the states of Illinois, Iowa and Indiana. The information could include name, account number, expiration date or "other numerical information," the company said.
Sensitive information such as Social Security numbers, birth dates and driver's license information was not compromised because stores don't collect that information, the company said.
The supermarket chains on Friday followed in the footsteps of other retailers, including Target which had a huge breach during the last Christmas shopping season, in advising customers to check credit reports and offering credit monitoring. It has become standard procedure for retail data breaches, which seem to happen almost weekly.
"It just seems to be the knee-jerk reaction when there's a breach," said Paul Stephens, spokesman for the Privacy Rights Clearinghouse. "It makes no sense at all ... I can't even envision a situation where credit monitoring would be helpful where it's strictly a breach of payment card information."
Fraudulent use of a stolen card number won't show up on a credit report because they don't show individual charges. And credit reports don't show debit card information at all.
The best advice is always free: Check account statements for your credit or debit cards used at the retailer, looking for unfamiliar charges. After a breach, go online to check account statements more frequently than waiting for a monthly statement.
If you find a fraudulent charge, report it to your card issuer -- usually a bank -- by calling the number on the back of the card. It probably won't hold you liable for any of the charges and will issue you a new card.
But Jewel is advising customers whose payment cards may have been affected to check their credit reports at AnnualCreditReport.com, which by federal law allows consumers to check one report from each of the big three credit bureaus once a year for free. The bureaus are TransUnion, Equifax and Experian.
Checking your credit reports is generally a good idea -- to look for errors and to make sure nobody opened a new credit account in your name, a potentially serious problem. But a stolen card number alone is not enough for a thief to open a new credit account. Typically, a thief would have to have our Social Security number, which was not information Jewel-Osco had.
So, checking your credit report for payment card fraud is nonsense.
The supermarket chain also said it would offer 12 months of complimentary consumer identity protection services through AllClear ID. Credit monitoring is often the centerpiece of such services.
"Credit monitoring does nothing to identify or alert you when someone has compromised your existing payment information," Ulzheimer said. "That type of fraudulent activity does not show up on a credit report, so credit monitoring is woefully inadequate."
In general, privacy experts are lukewarm on credit monitoring but say it's OK to sign up when a retailer is offering it for free. Just don't expect it to help with this latest data breach.
A possible downside, however, is that a credit monitoring service is likely to hassle you after the free 12 months of service expire, Stephens said. "Most likely they're going to be bombarding you with marketing to continue," he said.
Jewel-Osco did not respond to a request for comment about why it offered credit monitoring and advised customers to check credit reports.
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