Color of Money Live: What's next after the Equifax breach?

Sep 14, 2017

Join Washington Post nationally syndicated personal finance columnist Michelle Singletary for an online discussion.

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So glad you could join me today.

A lot is going on. I see quite a few questions about Equifax. 

But also I have two guest talking about the "Freshman Year for Free" program. It's a great way to shave up to 25% off the cost of tuition. 

Let's get started. 

While much of the emphasis is to freeze our credit, what about our assets? Presumably, our stolen information could be used to access bank, brokerage, or other accounts we have and clean them out. How do we protect ourselves from that possibility?

 

Read Michelle's column: What did Equifax executives know and when did they know it?


 

You are so right. You can freeze your credit file but your other accounts are vulnerable. 

What I do to try and protect myself if put alerts on all my accounts. So anytime any transaction is made I get an email and/or text. 

I also don't use my debit card to make purchases except at the one grocery store I use. 

But folks really with this breach you will have to be constantly checking your accounts. Get stronger passwords. Watch. Watch. Watch.

My husband and I were both part of the Equifax breach. So far, nothing worrisome is showing up for either of us. However, we are planning to buy a house in spring 2018 -- so I'm a little more anxious than I might have otherwise been. Should we be enrolling in paid credit monitoring? Just enrolling in the Equifax one-year monitoring? Something else? Nothing, other than paying close attention to our accounts and credit reports from the other bureaus?

Right now I think people should freeze, freeze, freeze their files. Meaning you lock down the ability of anyone to look at your credit reports. The Post has written a lot on how to do this. And my column on Sunday will also address this issue.

FTC.gov has a lot of information on how to do a credit freeze.

I've never heard of a CLEP exam before this. Can you explain how they work?

CLEP exams are offered by the College Board, the same folks who do the SAT and AP. CLEP stands for College Level Examination Program. There are 32 subject exams. If you get a passing score on a CLEP exam, you earn a college credit that can be transferred to more than 2,900 colleges. It is a great way to save on tuition while gaining knowledge too.

And to put the question in context, CLEP is a way to save on tuition. It's much like your kid taking the AP exam and scoring so well that he or she can opt out of a college course. 

My oldest child, who graduated last May was able to start the University of Maryland with a semester worth of college credits because of her performance on several AP exams.

CLEP is similar but more accessible to folks. AND the the Freshman Year for Free program will give anyone access to the online material to help pass those exams. PLUS they will pay the exam fees. 

Just to jumpstart the conversation, what is this program and how can it help people save on college costs?

Modern States Freshman Year for Free is an on-ramp to college that enables learners of all ages to earn college credits. It works by using courses taught by top college professors available at www.ModernStates.com.

The Modernstates.org site has a full set of online college courses from top professors that you can access for free, like accessing a movie on Netflix.  Textbooks are included online for free as well. After you take the course, you can pass a well established exam, called the CLEP from College Board, that is accepted for credit at 2,900 universities.  We are also paying for the first 10,000 CLEP exams, which usually cost $85.

Please address the possibility of our stolen identities being used to fraudulently file a tax return, and how that could delay our own returns from being processed as a result, including the delay of refunds people are counting on. Is the IRS working on anything to prevent this from happening?

I hear you. I actually know people who had this happen. It's a nightmare to clear up.

I do plan to address this in my column. But the IRS says one way to beat the crooks is to file early. So folks if you are prone to procrastinate, get over it. Because with this breach this type of identity theft could happen to you. 

I am the only person in the family who can't reasonably drive to either of our locations (uncle's house and cousin's house), so I am the only one who has to buy an airline ticket. A few days ago I got a call from my uncle that they were switching to cousin's house this year for several reasons, some of them very foreseeable (though not by me). I managed to find a flight to cousin's location on the same airline. I only had to pay an extra $12 even after the $200 change fee, but it really irks me that I have now paid nearly $550 for a less than $350 ticket (and could have travelled for around $250 on a different airline). I really do like my family. Thanksgiving is a great time. I have only missed once in my entire life. But I am saving to replace my TV (still using a CRT that I got off Craig's list for $25) and I could have used that $300. I want to let it go. I know it isn't that big a deal. The only reason I am saving up to replace the TV is because I won't mess with my planned savings when the stuff I already have is functional. I'd save a little less for the month if something broke and wasn't worth fixing, but I don't go off plan for a want. And yet, I'm still irked. Any suggestions about how to let go of it? In the end, it is just money. I know I fall into the fortunate end of things, and I'm not losing sleep over $300. And yet, still....irked.

I feel you. I have family that often causes me to spend more because of decisions they make. 

So here's what you can do

1. Be irked. You have the right to be pissed (I know it's a bit of a harsh word but hey I would be pissed if I had to fork over an extra $300). You vented to me and that's good. Vent to just one more person. 

2. Then be done. I think it's healthy to vent. But once you do, let it go. For real. Don't mention to your family. Don't complain when you get there. Don't even joke about it because you never know who doesn't have a good sense of humor. 

3. Count your blessing that you could afford the switch. And for those who couldn't, don't ever do it if you can't afford it. If there is a change and it's out of your budget, oh well. See you guys next year! That will hopefully make people realize that change plans impact people's bottom line. 

Finally, I think you did a good thing. And although I'm frugal too sometimes stuff like this happens. Have some turkey for me.

I asked Steve and David why they are doing this. I want you to hear why too. 

How much of your own money have you put up and why are you two doing this? 

I am doing this as a philanthropy just as part of trying to have a meaningful life, and because I think it is a pretty simple idea that might help a lot of people.  I really believe that access to education is fundamental to a world that respects every individual. I have done all the funding so far, and the courses and website are now fully built, so the more people who use them, the better.

I am doing this to make college more affordable and accessible for everyone.

Wow I cannot believe that the IRS has a 'solution' that basically blames the taxpayer. 'file early.' wow. The tax code is so complicated it takes most people 3 months to file their tax returns (not to mention it taking 1-2 months to get all the information you need to file it) -- and the IRS has NOTHING To say except to blame the taxpayer. Wow.

Well to be fair they had more to say. They are putting in place some measures to help folks. 

But really the crooks are pretty clever. It's their job. 

Now once this happens I do believe the IRS should move heaven and earth to help the taxpayer. That has not always happened. 

Are textbooks and other materials included in the Modern States courses? Or do those require additional purchase?

They are included free, online as well.

There are two chats listed under Michelle's columns, and the second one (which has no activity) is the one listed on the home page: http://live.washingtonpost.com/color-of-money-live-20170907-new.html Despite the URL, it has a date of 9/14 on her columns page. You might want to redirect that one to here. -A friendly neighborhood web manager :)

Hey -- Chat producer here. Thanks, friendly-neighborhood-web-manager!

You're correct. And we did. I crossed some wires with the chat last week and it caused some issues now. Problem now solved.

What are your estimates on how much people can save taking CLEP courses? 

A lot of traditional online courses for credit can cost $1,000 or more; even $2,000, particularly when you consider the cost of textbooks, travel and so on.  ModernStates.org saves all of that. The only cost is the exam fee to College Board which we are covering for the first 10,000, and hope other donors will cover after that.

People can save more than $10,000 by taking free courses on ModernStates.org and then passing eight CLEP exams to do their Freshman Year for Free! They can save 25 percent of the cost of college tuition.

Michelle, What should we do? Why even shred documents when my digital information is up for grabs? Thanks.

I hate to put the pressure on you but it's on. WE have to do what WE can to protect ourselves.

Why shred? Because there are some folks who will go through your trash. There are the savvy online hackers and the regular Joe crook who mines for data from trash or by stealing your wallet or purse. 

Here's some things I do to protect myself

-- I don't carry my checkbook around like I used to. Think about it. Your checkbook has some vital info. So I try to only take it when I know for sure I need to write a check.

-- I try not to keep in my purse bills. Why? Because a lot of security questions ask things like who do you bank with, what is your car note or last utility bill. 

-- We shed financial documents. 

-- I question everyone who asks for my Social Security No. Once I was picking up a table I bought. At the warehouse the clerk asked for my S.S. no. I was like, "You have lost your mind!" I had my receipt and proof of purchase. I was okay showing my drivers license. But why on earth would they need my S.S No.? The clerk said that's how they put in the system of who picks up what. I stood my ground with a line of folks standing behind me. "No sir! You can use my receipts or you can give me my money back." They gave me my merchandise. 

-- I put alerts on any and all accounts I can. You can set the dollar amount on when to get an alert. I set it at like $5. And you should too. Why? Because often criminals will try and charge something low like $5 or $7 to see if it goes through. 

-- The big dogs like my retirement account, I'm on there all the time just checking nothing funky is happening. 

Trying to be as proactive as I can recognizing that even these measures might not be enough.

So, what has been your experience with people taking the online CLEP courses? Are they passing the exams, getting college credit?

The pass rate on CLEP exams is 70 percent using Modern States courses. We have 23,000 registered users; people are passing these exams after taking Modern States courses are earning college credits for free.

All sorts of people are taking the courses and passing the CLEPs, including 17 year old home schoolers, working moms, people who needed one class to graduate, and others.

This is something I'm mulling over. Should you only have kids if you can afford to send them to college? Let's say you can afford their food, clothing, healthcare, basic needs, etc. You also have a house (mortgage), some savings, and are working on your own retirement. But, you are presently unable to save for college for all/any of your kids with all other expenses (HCOL area is 1 factor). Do you not have kids? Do you limit them? If you have 2 kids but want 3, should you stop because you can't pay for college? Thanks for thoughts/opinions.

Deciding how many kid sto have is a very personal decision. College tuition is only factor to consider. Personally, I would not make the decision solely based on college cost. 

How about rethinking the way we see college rather than if we can afford to send them to college? 

Your child does not have to go away to college. He or she does not have to live on campus. 

He or she can go to community college first and then transfer to 4-year university.

It's like we have accepted that an undergraduate education must cost $80,000 to $100,000 and that's that. 

Nooooo.

So if we don't accept this fact, then you don't accept you can't afford children. 

 

Can you tell us more about how the classes were developed and who teaches them? How confident are you that people will be able to pass AP and CLEP exams after investing their time?

Our goal was to recruit the best possible professors from top universities to teach each course, consistent with the material tested.  For example, we have the former dean of the George Washington Law School to teach Introductory Business Law and a professor from Johns Hopkins to teach college algebra. The passing rates have been good so far, and there are practice questions from the College Board on our site.  Ultimately though, it is up to each student to learn the material and pass the exam.

The courses were developed by the college professors to help you pass the CLEP or AP exams and gain additional knowledge too. You really need to do all the practice questions multiple times, watch the video lectures and master the material. If you work hard, your chances of passing the exam are very high.

I've successfully put a freeze on my Transunion record via their website. However, I'm having issues with Equifax and Experian. They are telling me to send a letter with proof of my identity. I'm wondering why that might be and admitting that I am less likely to do it because online or by telephone would be quicker. Any suggestions? Also, if I had kids, I would be all over the CLEP classes for them. Thanks.

I'm starting to hear a lot from people who are having trouble putting on the freeze. And frankly, I'm not a fan of shipping my stuff though the mail either.

I suspect because of the breach, Equifax can't handle the volume of people asking for a freeze. And then Experian is caught up because people think they are Equifax, so that bureau is being swamped. 

Since the company is obviously not safe, weren’t you concerned about giving Equifax six out of your nine social security numbers? I also understand the new Equifax site, which has been set up to check if your information was stolen, isn’t secure. Many people are saying that it would be better to use one of the other credit bureaus to monitor their credit report, not the free one offered by Equifax. Finally, people are saying that if you take the free Equifax monitoring, you won’t be able to join a class-action suit. Your thoughts?

I did pause about putting in the info. Like so many I was like, "What? Wait, weren't you just breached? Did it anyway because I wanted to know. I put in a request for the free monitoring service but I'm not a fan of the monitoring services and wouldn't pay for the service. Why? 

They can't prevent the thief of your information. They can only tell you AFTER the fact. Now, they have resources to help you clear things up but you can really do that yourself. 

As for the class action issue, Equifax fixed that. They took out the language requiring people to accept arbitration. 

Are these courses free to anyone? I'd love to do an on-line accounting course but haven't every gotten around to it . . . are they all self directed/pre recorded or do you need to attend at certain times? I know I don't fall into your mission, but I'm intrigued.

They are free to anyone.  You can watch them anytime.  You can just use them to learn the material, even if you don't seek to take the exam at the end. 

We have an online accounting course. It is available on ModernStates.org for you to take any time you want, at any pace you desire. The courses are free and open to anyone, including someone like you seeking knowledge but not college credit.

Remember you have a State Senator, a Congressman, and two US senators. When I had a dispute with Dominion Energy (who is state regulated) I wrote the four of them a letter, explained my case, and a member of each staff contacted Dominion, which got their attention - a utility truck rolled the next day. I sent the staffers who helped me a thank-you note and a small Starbucks card. It is your big gun, don't use it too often.

You are so right. Actually writing about this very tactic for my Sunday column.

We should all be united in demanding Congress make the bureaus set up a FREE way for us to freeze and unfreeze our credit files. 

Who is with me?

I froze all of our credit when UMD had its data breach. I can't seem to figure out if that will protect me now, or if I need to take additional steps. Do you know?

If you have locked down your files, you are in good shape! Better than most. 

But keep in mind other financial accounts could still be compromised if a credit pull isn't necessary. So stay alert. 

HOWEVER shouldn't all banks/credit cards/whatever accounts you have -- be that much more diligent with your information and double and triple check? if institutions one uses aren't doing this, get rid of them, and get another one. Seriously. THOSE COMPANIES are ones that are using Equifax. We the people are *not* authorizing companies like equifax to use our information, they just use it anyway. The companies that you do business with should be 10000 times more diligent than they were before. They watch the same news the rest of us do.

Child you so right. But reality check. 

Our information has long been compromised. It's out there. All we can do is take measures to try and protect ourselves. 

 

To the OP: 2-3 months to file your return? Really? Takes us 1/2 day, mostly because we obsess on checking and triple checking our math. Do you own multiple corporations and investment accounts? And the IRS requires that employers, banks and other companies to have that information to you by Jan. 31. Not disagreeing about the complexity of the tax code, but it's not that difficult to file early if you try. IRS is trying to help.

I hear you. But trust, it takes some time. Sure you can get all the documents together but it does take us (we do our own taxes with software) some good amount of time to assemble all the documents we need. Then find the time to do it without multiple interruptions from kids, dog, work, life!

Are you a single person? If it's just you then I give you permission to decide how important the holiday is and skip it. If you are married with family why not start your own holiday dinner at home. Go see the family another time. Mandatory big family get togethers can be a burden both for the pocketbook and peace of mind.

You are trying to help and that's nice. But I'm not feeling the comment about the holiday not being as important because the person might be single. 

Single, married, divorce, crazy -- staying connected to family is important. 

3 months to file? 1-2 months to gather the information? Start working on it NOW. Seriously, anyone who's had to file a return in the past should either have some experience with it, or have a tax preparer on speed dial. Use those resources. If you are making some large change in your life, like buying a house? Get the documents you need for taxes put together NOW. Do some rudimentary calculations NOW. Don't wait until January to panic about taxes. Imagine the look on your preparer's face when you show up with everything properly sorted and categorized. Or being able to fill out the paperwork yourself while still in January!.

You so cute! Like you don't know that people ain't that organized. Heck, not even me.

And I'm pretty good at this stuff. 

People are busy. We got concerts, soccer, basketball, footfall, swimming, band concerts to shuttle kids to and from, ministry meetings, family gatherings, trying to hang with friends, dogs to walk, bosses who expect us to work 24/7, or just issues that keep us sitting, staring off into space cuz you so tired you can't move. 

...is unfortunately not a solution for many (most?) freelancers. The 1099s stream in over the first few months of the year and we can rarely file until late March. The freeze approach is frustrating in that one would have to go to extra hassle and cost every time you need a copy of your report. My hope would be that this finally forces a solution better than SSN and date of birth.

My hope too!

Michelle, I'm moving later this year - selling current house and moving out of state. I'm worried that if I put a credit freeze in place now it'll just be a huge hassle when applying for a new mortgage, new utilities accounts, etc. Am I being overly cautious or lazy or both?

Unlocking your files takes about one to two days. I hope you don't plan to buy a house in one day. 

But I hear you. It's a hassle because we are so accustomed to easily getting credit. Perhaps the pause of a freeze will help in getting people to think about the credit they are applying for. 

And if you have mutual funds, you have to wait because it takes for.ev.er. for the investment banks to send you your income statement. We can't file until Vanguard gets around to mailing us those forms!! X(

I hear you.

I presume you will be addressing this in your column, but I have read of some issues with credit freezes, specifically regarding the PINs assigned to you by the credit bureaus - either that they are not secure enough, or too secure (and can't be changed) - any thoughts now?

Boy, that is another column. I'll find out. 

The agency is horrendously understaffed because of the Republican budget, and their priorities are set by politicians. Please don't take it out on the poor people who work there (I'm not one, but have to deal with them all the time). The rank and file do their best to work with people who are victims of identity theft.

Amen!

I didn't get a chance to read last weeks chat until Sunday. I would like to add something about wills. I was the executor of both my parents wills. My Mom died first and my Dad told me he handled everything. When he died two years later I found out not only had he not done anything, but that their wills were never notarized. The attorney who had drafted them had retired and the office was closed. Luckily the attorney I retained to help me knew one of the witnesses on the will (His child's teacher) and we were able to have the state recognize them as valid. Lesson: Wills are important, but more important that they be done correctly. If your an executor make sure the will is correct before they pass.

Thank you for sharing your experience. So very important to double check documents are executed the right way.

Michelle, yesterday on the New York Times, I read that Equifax is waiving fees to sign up for a security freeze (it's $10 for me, $10 for my husband in our state) until Nov. 21st, so that might account for the long hold times and waits on Equifax.

You are right. People are getting the word that a freeze is the best protection. I'll be joining the queue too. 

BUT we should also make a fuss that they shouldn't have a cut off for the free freeze. Y'all call and complain!

I already have a freshman in college at Clemson.What are some practical ways to save money on a traditional 4 year college or identify scholarships that are not for sports or the poor?

Good news. Your freshman at Clemson can earn college credits and save on tuition by taking and passing  some, but not all, CLEP exams. Clemson grants credit for passing scores on CLEP subject exams but not on CLEP general exams. Taking a ModernStates course will increase the chances of a passing score. And your freshman should check to be sure that whatever CLEP exam they want to take is accepted for credit at Clemson.

Yeah, had to do when 1099s come late (always), and some investments don't have to send information until late February.

Thanks for sharing. 

Thank you for joining me today. Be sure to check out my column on Freshman Year for Free. 

If you haven't already, read and share the newsletter about Equifax, which was clearly the hot topic today.

And if any of you are having trouble signing up for the free monitoring service or freezing your credit files, please email me at colorofmoney@washpost.com. 

See you next week. 

In This Chat
Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Wednesday and Sunday and is carried in more than 120 newspapers.

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Steve Klinsky
Steve Klinsky, the founder and CEO of Modern States, has been an active philanthropist and education reformer for many years. Klinsky is founder and CEO of New Mountain Capital, a private equity firm.
David Vise
David A. Vise, a Pulitzer Prize-winner, is executive director of Modern States Education Alliance. He joined New Mountain Capital as a senior advisor in 2008. Previously, Mr. Vise was a reporter for The Washington Post, where he worked for more than two decades.
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