Later this month, all of the three major consumer credit bureaus will be required to offer free credit freezes to all Americans and their dependents. Maybe you’ve been holding off freezing your credit file because your home state currently charges a fee for placing or thawing a credit freeze, or because you believe it’s just not worth the hassle. If that accurately describes your views on the matter, this post may well change your mind.
A credit freeze — also known as a “security freeze” — restricts access to your credit file, making it far more difficult for identity thieves to open new accounts in your name.
Currently, many states allow the big three bureaus — Equifax, Experian and TransUnion — to charge a fee for placing or lifting a security freeze. But thanks to a federal law enacted earlier this year, after Sept. 21, 2018 it will be free to freeze and unfreeze your credit file and those of your children or dependents throughout the United States.
KrebsOnSecurity has for many years urged readers to freeze their files with the big three bureaus, as well as with a distant fourth — Innovis — and the NCTUE, an Equifax-operated credit checking clearinghouse relied upon by most of the major mobile phone providers.
There are dozens of private companies that specialize in providing consumer credit reports and scores to specific industries, including real estate brokers, landlords, insurers, debt buyers, employers, banks, casinos and retail stores. A handy PDF produced earlier this year by the Consumer Financial Protection Bureau (CFPB) lists all of the known entities that maintain, sell or share credit data on U.S. citizens.
The CFPB’s document includes links to Web sites for 46 different consumer credit reporting entities, along with information about your legal rights to obtain data in your reports and dispute suspected inaccuracies with the companies as needed. My guess is the vast majority of Americans have never heard of most of these companies.
Via numerous front-end Web sites, each of these mini credit bureaus serve thousands or tens of thousands of people who work in the above mentioned industries and who have the ability to pull credit and other personal data on Americans. In many cases, online access to look up data through these companies is secured by nothing more than a username and password that can be stolen or phished by cybercrooks and abused to pull privileged information on consumers.
In other cases, it’s trivial for anyone to sign up for these services. For example, how do companies that provide background screening and credit report data to landlords decide who can sign up as a landlord? Answer: Anyone can be a landlord (or pretend to be one).
The truly scary part? Access to some of these credit lookup services is supposed to be secured behind a login page, but often isn’t. Consider the service pictured below, which for $44 will let anyone look up the credit score of any American who hasn’t already frozen their credit files with the big three. Worse yet, you don’t even need to have accurate information on a target — such as their Social Security number or current address.
KrebsOnSecurity was made aware of this particular portal by Alex Holden, CEO of Milwaukee, Wisc.-based cybersecurity firm Hold Security LLC [full disclosure: This author is listed as an adviser to Hold Security, however this is and always has been a volunteer role for which I have not be compensated].
Holden’s wife Lisa is a real estate agent, and as such she has access to a more full-featured version of the above-pictured consumer data lookup service (among others) for the purposes of helping clients determine a range of mortgage rates available. Mrs. Holden said the version of this service that she has access to will return accurate, current and complete credit file information on consumers even if one enters a made-up SSN and old address on an individual who hasn’t yet frozen their credit files with the big three.
“I’ve noticed in the past when I do a hard pull on someone’s credit report and the buyer gave me the wrong SSN or transposed some digits, not only will these services give me their credit report and full account history, it also tells you what their correct SSN is,” Mrs. Holden said.
With Mr. Holden’s permission, I gave the site pictured above an old street address for him plus a made-up SSN, and provided my credit card number to pay for the report. The document generated by that request said TransUnion and Experian were unable to look up his credit score with the information provided. However, Equifax not only provided his current credit score, it helpfully corrected the false data I entered for Holden, providing the last four digits of his real SSN and current address.
“We assume our credit report is keyed off of our SSN or something unique about ourselves,” Mrs. Holden said. “But it’s really keyed off your White Pages information, meaning anyone can get your credit report if they are in the know.”
I was pleased to find that I was unable to pull my own credit score through this exposed online service, although the site still charged me $44. The report produced simply said the consumer in question had requested that access to this information be restricted. But the real reason was simply that I’ve had my credit file frozen for years now.
Many media outlets are publishing stories this week about the one-year anniversary of the breach at Equifax that exposed the personal and financial data on more than 147 million people. But it’s important for everyone to remember that as bad as the Equifax breach was (and it was a total dumpster fire all around), most of the consumer data exposed in the breach has been for sale in the cybercrime underground for many years on a majority of Americans — including access to consumer credit reports. If anything, the Equifax breach may have simply helped ID thieves refresh some of those criminal data stores.
It costs $35 worth of bitcoin through this cybercrime service to pull someone’s credit file from the three major credit bureaus. There are many services just like this one, which almost certainly abuse hacked accounts from various industries that have “legitimate” access to consumer credit reports.
According to the U.S. Federal Trade Commission, when the new law takes effect on September 21, Equifax, Experian and TransUnion must each set up a webpage for requesting fraud alerts and credit freezes.
The law also provides additional ID theft protections to minors. Currently, some state laws allow you to freeze a child’s credit file, while others do not. Starting Sept. 21, no matter where you live you’ll be able to get a free credit freeze for kids under 16 years old.
Identity thieves can and often do target minors, but usually this type of fraud usually isn’t discovered until the affected individual tries to apply for credit for the first time, at which point it can be a long and expensive road to undo the mess. As such, I would highly recommend that readers who have children or dependents take full advantage of this offering once it’s available for free nationwide.
In addition, the law requires the big three bureaus to offer free electronic credit monitoring services to all active duty military personnel. It also changes the rules for “fraud alerts,” which currently are free but only last for 90 days. With a fraud alert on your credit file, lenders or service providers should not grant credit in your name without first contacting you to obtain your approval — by phone or whatever other method you specify when you apply for the fraud alert.
Under the new law, fraud alerts last for one year, but consumers can renew them each year. Bear in mind, however, that while lenders and service providers are supposed to seek and obtain your approval if you have a fraud alert on your file, they’re not legally required to do this.
A key unanswered question about these changes is whether the new dedicated credit bureau freeze sites will work any more reliably than the current freeze sites operated by the big three bureaus. The Web and social media are littered with consumer complaints — particularly over the past year — about the various freeze sites freezing up and returning endless error messages, or simply discouraging consumers from filing a freeze thanks to insecure Web site components.
It will be interesting to see whether these new freeze sites will try to steer consumers away from freezes and toward other in-house offerings, such as paid credit reports, credit monitoring, or “credit lock” services. All three big bureaus tout their credit lock services as an easier and faster alternative to freezes.
According to a recent post by CreditKarma.com, consumers can use these services to quickly lock or unlock access to credit inquiries, although some bureaus can take up to 48 hours. In contrast, they can take up to five business days to act on a freeze request, although in my experience the automated freeze process via the bureaus’ freeze sites has been more or less instantaneous (assuming the request actually goes through).
TransUnion and Equifax both offer free credit lock services, while Experian’s is free for 30 days and $19.99 for each additional month. However, TransUnion says those who take advantage of their free lock service agree to receive targeted marketing offers. What’s more, TransUnion also pushes consumers who sign up for its free lock service to subscribe to its “premium” lock services for a monthly fee with a perpetual auto-renewal.
Unsurprisingly, the bureaus’ use of the term credit lock has confused many consumers; this was almost certainly by design. But here’s one basic fact consumers should keep in mind about these lock services: Unlike freezes, locks are not governed by any law, meaning that the credit bureaus can change the terms of these arrangements when and if it suits them to do so.
If you’d like to go ahead with freezing your credit files now, this Q&A post from the Equifax breach explains the basics, and includes some other useful tips for staying ahead of identity thieves. Otherwise, check back here later this month for more details on the new free freeze sites.
The past month has seen one blockbuster revelation after another about how our mobile phone and broadband providers have been leaking highly sensitive customer information, including real-time location data and customer account details. In the wake of these consumer privacy debacles, many are left wondering who’s responsible for policing these industries? How exactly did we get to this point? What prospects are there for changes to address this national privacy crisis at the legislative and regulatory levels? These are some of the questions we’ll explore in this article.
In 2015, the Federal Communications Commission under the Obama Administration reclassified broadband Internet companies as telecommunications providers, which gave the agency authority to regulate broadband providers the same way as telephone companies.
The FCC also came up with so-called “net neutrality” rules designed to prohibit Internet providers from blocking or slowing down traffic, or from offering “fast lane” access to companies willing to pay extra for certain content or for higher quality service.
In mid-2016, the FCC adopted new privacy rules for all Internet providers that would have required providers to seek opt-in permission from customers before collecting, storing, sharing and selling anything that might be considered sensitive — including Web browsing, application usage and location information, as well as financial and health data.
But the Obama administration’s new FCC privacy rules didn’t become final until December 2016, a month after then President-elect Trump was welcomed into office by a Republican controlled House and Senate.
Congress still had 90 legislative days (when lawmakers are physically in session) to pass a resolution killing the privacy regulations, and on March 23, 2017 the Senate voted 50-48 to repeal them. Approval of the repeal in the House passed quickly thereafter, and President Trump officially signed it on April 3, 2017.
In an op-ed published in The Washington Post, Ajit Pai — a former Verizon lawyer and President Trump’s pick to lead the FCC — said “despite hyperventilating headlines, Internet service providers have never planned to sell your individual browsing history to third parties.”
FCC Commissioner Ajit Pai.
“That’s simply not how online advertising works,” Pai wrote. “And doing so would violate ISPs’ privacy promises. Second, Congress’s decision last week didn’t remove existing privacy protections; it simply cleared the way for us to work together to reinstate a rational and effective system for protecting consumer privacy.”
Sen. Bill Nelson (D-Fla.) came to a different conclusion, predicting that the repeal of the FCC privacy rules would allow broadband providers to collect and sell a “gold mine of data” about customers.
“Your mobile broadband provider knows how you move about your day through information about your geolocation and internet activity through your mobile device,” Nelson said. The Senate resolution “will take consumers out of this driver’s seat and place the collection and use of their information behind a veil of secrecy.”
Meanwhile, pressure was building on the now Republican-controlled FCC to repeal the previous administration’s net neutrality rules. The major ISPs and mobile providers claimed the new regulations put them at a disadvantage relative to competitors that were not regulated by the FCC, such as Amazon, Apple, Facebook and Google.
On Dec. 14, 2017, FCC Chairman Pai joined two other Republic FCC commissioners in a 3-2 vote to dismantle the net neutrality regulations.
As The New York Times observed after the net neutrality repeal, “the commission’s chairman, Ajit Pai, vigorously defended the repeal before the vote. He said the rollback of the rules would eventually benefit consumers because broadband providers like AT&T and Comcast could offer them a wider variety of service options.”
“We are helping consumers and promoting competition,” Mr. Pai said. “Broadband providers will have more incentive to build networks, especially to underserved areas.”
Some might argue we’ve seen reduced competition and more industry consolidation since the FCC repealed the rules. Major broadband and mobile provider AT&T and cable/entertainment giant Time Warner are now fighting the Justice Department in a bid to merge. Two of the four-largest mobile telecom and broadband providers — T-Mobile and Sprint — have announced plans for a $26 billion merger.
The FCC privacy rules from 2016 that were overturned by Congress sought to give consumers more choice about how their data was to be used, stored and shared. But consumers now have less “choice” than ever about how their mobile provider shares their data and with whom. Worse, the mobile and broadband providers themselves are failing to secure their own customers’ data.
This month, it emerged that the major mobile providers have been giving commercial third-parties the ability to instantly look up the precise location of any mobile subscriber in real time. KrebsOnSecurity broke the news that one of these third parties — LocationSmart — leaked this ability for years to anyone via a buggy component on its Web site.
LocationSmart’s demo page featured a buggy component which allowed anyone to look up anyone else’s mobile device location, in real time, and without consent.
We also learned that another California company — Securus Technologies — was selling real-time location lookups to a number of state and local law enforcement agencies, and that accounts for dozens of those law enforcement officers were obtained by hackers. Securus, it turned out, was ultimately getting its data from LocationSmart.
This week, researchers discovered that a bug in T-Mobile’s Web site let anyone access the personal account details of any customer with just their cell phone number, including full name, address, account number and some cases tax ID numbers.
Not to be outdone, Comcast was revealed to have exposed sensitive information on customers through a buggy component of its Web site that could be tricked into displaying the home address where the company’s wireless router is located, as well as the router’s Wi-Fi name and password.
It’s not clear how FCC Chairman Pai intends to “reinstate a rational and effective system for protecting consumer privacy,” as he pledged after voting last year to overturn the 2015 privacy rules. The FCC reportedly has taken at least tentative steps to open an inquiry into the LocationSmart debacle, although Sen. Ron Wyden (D-Ore.) has called on Chairman Pai to recuse himself on the inquiry because Pai once represented Securus as an attorney. (Wyden also had some choice words for the wireless companies).
The major wireless carriers all say they do not share customer location data without customer consent or in response to a court order or subpoena. Consent. All of these carriers pointed me to their privacy policies. It could be the carriers believe these policies clearly explain that simply by using their wireless device customers have opted-in to having their real-time location data sold or given to third-party companies.
Michelle De Mooy, director of the privacy and data project at the Center for Democracy & Technology (CDT), said if the mobile giants are burying that disclosure in privacy policy legalese, that’s just not good enough.
“Even if they say, ‘Our privacy policy says we can do this,’ it violates peoples’ reasonable expectations of when and why their location data is being collected and how that’s going to be used. It’s not okay to simply point to your privacy policies and expect that to be enough.”
When the FCC’s repeal of the net neutrality rules takes effect on June 11, 2018, broadband providers will once again be regulated by the Federal Trade Commission (FTC). That power was briefly shared with FCC when the agency under the Obama administration passed its net neutrality rules with the assumption that it could regulate broadband providers like telecommunications companies.
When it comes to investigating companies for privacy and security violations, the FTC’s primary weapon is The FTC Act, which “prohibits unfair and deceptive acts or practices in or affecting commerce.” According to the FTC Act, a “misrepresentation or omission is deceptive if it is material and is likely to mislead consumers acting reasonably under the circumstances.” It also finds that an act or practice “is unfair if it causes, or is likely to cause, substantial injury that is not reasonably avoidable by consumers, and not outweighed by countervailing benefits to consumers or competition.”
It’s difficult to think of a bigger violation of those principles than the current practice by the major mobile providers of sharing real-time location data on customers with third parties, without any opportunity for customers to opt-in or opt-out of such sharing.
But it’s unclear whether the FTC would take take any action against such activity, or indeed if it has any precedent to do so. The agency had the ability to go after mobile broadband providers for privacy and security violations between 2002 and 2015, and so KrebsOnSecurity asked the commission to share how many times during that period that it took enforcement actions against broadband providers.
The list I got back from them wasn’t exactly privacy or security focused. The FTC cited a case in 2003 in which it sued AOL and CompuServe over unfair billing practices. In 2009, it helped to take down 3FN, a small, shady ISP that was based in the United States but run by Russians and hosting a stupendous amount of malware, scams and illegal content (i.e. child pornography).
In 2014, the FTC alleged that AT&T Mobility deceptively advertised “unlimited” data while throttling mobile customers who used certain amounts of data (this case is still pending but a recent appeals court decision cleared the way for the FTC to continue its lawsuit).
In 2015, TracFone, the largest prepaid mobile provider in the United States, agreed to pay $40 million to the FTC for consumer refunds to settle charges that it deceived millions of consumers with regard to its “unlimited” data service.
The FTC also cited a scolding letter (PDF) that it sent to Verizon over issues related to the security of its customer routers. No action was taken by the FTC in that case.
How eager the FTC will be to police privacy practices of broadband providers may come down to the priorities of the agency’s new leaders. The Trump administration just tapped Andrew Smith as head of the FTC’s consumer protection office. Smith is a lawyer who used to represent many of the companies that the agency is already investigating.
Smith will need to recuse himself from multiple ongoing investigations his office would normally lead, including data breaches at Equifax and Facebook, thanks to his previous work on behalf of the companies. According to The Hill, Smith testified in October before the Senate Banking Committee on behalf of the credit reporting industry as the panel investigated an Equifax data breach that compromised more than 145 million people.
Gigi Sohn, a fellow at the Georgetown Law Institute for Technology Law and Policy and a former senior adviser to former FCC Chair Tom Wheeler in 2015, said the FTC doesn’t have a strong record on broadband privacy enforcement.
Sohn said the FTC’s legal framework does not require affirmative opt-in consent for browsing history and app usage, and that a provider would only have to let you opt-out — something that consumers rarely do and which companies routinely make it hard to do. More importantly, she said, while the FCC’s rules would have protected consumers before they were harmed, the FTC can only act after harm has already occurred.
“We passed privacy rules for broadband and mobile providers that would have required them to seek customer opt-in for anything that was considered sensitive,” Sohn said of her work at the FCC under the Obama administration. “The carrier had to give you clear and consistent opportunities to opt out. It was very broad, but the definition we set for personal information was far broader than what even the FTC considered sensitive.”
So the carriers are already reneging on their promise to customers that they won’t share location data without customer consent or a court order. But where does that leave us on net neutrality? The answer is that the major wireless carriers are already doing what was expressly prohibited under the FCC’s net neutrality rules: Favoring their own content over competitors, and letting companies gain more favorable access by paying more.
Around the time of the FCC’s repeal of the net neutrality rules last year, The Wall Street Journal prognosticated about what might happen with the regulations out of the way. To do this, it looked at some of the offerings the mobile carriers pitched before the rules were drawn up.
“One example of how things could work is the mobile wireless market, where some providers already have used pricing tactics to favor certain websites and services over others,” wrote John D. McKinnon and Ryan Knutson for The Journal:
The 2015 Obama-era rules didn’t explicitly prohibit these tactics, which generally allow customers to access certain websites without having it count against their monthly data cap. Wireless carriers, which often subject their users to strict data limits, were aggressive in experimenting with such plans, also known as “zero rating.”
Deals began emerging several years ago for inexpensive plans that offer unlimited high-speed access to popular services such as Facebook or Twitter, but limited or even restricted access to the rest of the internet.
T-Mobile US Inc. in late 2013 announced that its GoSmart Mobile brand had “become the first wireless provider…to offer free access to Facebook and Facebook Messenger for all of its wireless customers, even those without monthly data service.” The GoSmart Mobile plans started at $25 a month for “unlimited talk” with no other data service. T-Mobile has since transferred the GoSmart brand to another wireless firm.
In 2014, Virgin Mobile USA, a unit of Sprint Corp. , offered a wireless plan that cost $12, but users were only allowed to access one website: either Facebook, Twitter, Instagram or Pinterest. If they wanted all four, it was $10 more a month. Another $5 and they could access any online music streaming service.
Big internet providers also used zero-rating plans to favor their own content. AT&T Inc. gave paying customers unlimited usage of its own online video service DirecTV Now, while other video sites counted against monthly data caps. Verizon Communications Inc. did the same for its mobile video app, called go90.”
AT&T Mobility offers a zero-rating plan called “Sponsored Data” that allows content providers to pay up front to have streaming of that content allowed without counting against the provider’s monthly data caps.
Sohn said the FCC under the Obama administration initiated an investigation into AT&T’s Sponsored Data plan and Verizon for its go90 service, but that the inquiry was abandoned by the current FCC leadership.
There are some prospects for a Congressional repeal of this administration’s gutting of the FCC’s net neutrality rules. On May 16, the Senate approved a resolution nullifying the FCC’s rollback of the net neutrality rules. But the measure faces an uphill battle in the House.
“Right now we’re probably 30 to 40 members short of being able to bring a vote in the House,” Sohn said. “About 20 Democrats haven’t gotten on board, and we have no Republicans so far. But I think that’s going to change. If Congress repeals the net neutrality repeal, the next step would be to craft stronger rules [either at the FCC or Congress]. We have until the end of this Congress to get it done.”
The CDT’s De Mooy gives the effort to repeal the repeal of net neutrality rules slim chances of passage this year. But she said the prospects for revisiting net neutrality and consumer privacy in the next Congress look good, particularly if Democrats pick up additional seats in the House.
“It seems to be something the Democrats are taking up more now,” Demooy said. “So much depends on what happens in November. But that’s true of so many tech policy issues.”
When I first saw a Carnegie Mellon University researcher show me last week that he could look up the near-exact location of any mobile number in the United States, I sincerely believed the public would be amazed and horrified at the idea that mobile providers are sharing this real-time data with third party companies, and at the fact that those third parties in turn weren’t doing anything to prevent the abuse of their own systems.
Instead, after a brief round of coverage in several publications, the story fell out of the news cycle. A story this week in Slate.com lamented how little coverage the mainstream press has given to the LocationSmart scandal, and marvels at how much more shocked people were over the Cambridge Analytic scandal with Facebook.
“Privacy abuses and slip-ups by major tech companies have become so numerous, and the prospect of containing them seems so hopeless, that the public and much of the media have become nearly numb to them,” writes Will Oremus for Slate. “My data was hacked? So it goes. It may have been used in unauthorized ways by unspecified parties? C’est la vie.”
Oremus argues that what the LocationSmart scandal lacks is not import, nor the potential for serious harm, “but a link to some divisive political issue or societal outrage sufficient enough to generate visceral anger from people who aren’t privacy wonks.”
If you’ve read this far (bless you), don’t let breach fatigue and incessant media exposure of how little privacy we have harden into resignation. Yes, the prospects of any public debate about consumer privacy protections in the United States at the legislative level seem dim in a high-stakes mid-term election year. But supporters of net neutrality ideals can start getting involved by tweeting, calling and emailing the House lawmakers listed in red at BattleForTheNet.com.
While you’re at it, tell your lawmakers what you think about mobile providers giving or selling third-parties real-time access to customer location information, and let them know that this is no longer okay.
This is the second article in a two-part series. The first is here: Mobile Giants, Please Don’t Share the Where.
