Deciding to buy a home is a huge step for any person or family. It can be stressful not only for the financial pressure, but for the long, detailed processes it involves, including mountains of paperwork.
And included in all that paperwork is what amounts to one's entire life. There is virtually no other life event that involves such a complete and comprehensive overview of one's identity, from your address, driver's license number and social security number, to all of your assets, bank accounts, debts, employment history and much, much more. And you're handing it all over to a company.
For a group of HSBC mortgage customers in New Hampshire recently, the handing over of all that precious, personal information backfired.
HSBC announced earlier this month that it discovered that the personal information of many of its former and current mortgage customers had been breached and published on the Internet, including customers' names, Social Security numbers, account numbers, old account information and possibly some phone numbers, the bank wrote in a letter to state officials, according to the publication American Banker.
HSBC spokespersons told the publication IT Pro Portal they believe the breach happened around the end of 2014 and may have continued until the time it was discovered, around March 27.
What is perhaps even more troubling is the fact that some experts believe the breach was not a result of hacking - but was made possible by HSBC storing these customers' information on a vulnerable server that is accessible via the Internet.
There is no word yet whether any of the data has been misused for fraudulent purposes. In accordance with the law, HSBC has been contacting its customers to notify them of the breach, as well as notifying the major credit reporting agencies, according to SC Magazine.
How can one lessen the chances of something like this happening to them? Well, unless one has hundreds of thousands of dollars in cash that would allow them to buy a house outright without a mortgage, there's not much one can do to prevent having to hand over so much sensitive information to a bank or lender when buying a home.
However, there are steps people can take to remain vigilant about what personal information of theirs is being accessed, and what is being done with it.
1. Shred mail instead of just tossing it out with the trash. Major mortgage lender Fannie Mae says "dumpster diving" is one way thieves can get at your personal information. If you throw away even a single document from your mortgage lender or application, or even an unwanted credit card offer, they can pull personal information from that and use it to commit fraud against you.
2. Check your credit report regularly, and thoroughly. The earlier identity theft or fraud is detected, the less damage a thief has time to do, and the easier it can be to reverse it.
3. Monitor what information about your home purchase is posted online. Fannie Mae also warns homebuyers that sometimes the city or county government agency in the area where you bought your home will post information about home sales and purchases online, for demographic, economic or census purposes. Fannie Mae says people can often contact the government agency and ask that the information be removed. You may also want to do a general Google search by your new home's address to see what information real estate websites or mortgage lenders are posting online about the home purchase as well.
4. Freeze your credit when you know you won't be needing to open any new accounts for a while. Not many people know this, but yes, you can do this! John Sileo, a former identity theft victim who now educates consumers about protecting their identities says, after closing the mortgage deal and handling everything involved with it, if you know you won't be needing to open any new credit accounts or loans for a while, you can freeze your credit so that no one can open any new accounts tied to your identity without your personal authorization, sometimes in the form of a password. And, it doesn't affect your existing credit.
“It only freezes access to your account unless someone has a password to get in. It's like having a PIN number on your ATM card," Sileo explains. "It's the best step you can take to protect yourself - it can be done online, and takes just a few minutes."
In order to freeze your credit, you must individually contact the three major credit reporting agencies - Equifax, TransUnion and Experian. (Click these links to go to the page on each agency's website with information about how to set or remove a credit freeze)