700Credit Breach Exposes 5.6 Million Credit Files

A data breach at 700Credit, a Michigan-based company that runs credit checks and offers subprime solutions for auto dealers across the country, has compromised the credit records of at least 5.6 million consumers. 

Almost 18,000 car dealerships were affected by the data breach, according to CBT News. 

This company, 700Credit, is the biggest authorized reseller of credit reports from the three major credit reporting agencies, according to its website.

Consumer names, addresses, and Social Security numbers were stolen in the breach, according to 700Credit. 

How the Data Breach Happened

A bad actor with unauthorized access to records of personally identifiable information stole the personal data, according to 700Credit.

700Credit is contacting affected consumers about the breach and offering free credit monitoring services. The company said in a notice that there were no signs of identity theft, fraud, or other misuse of consumer information following the breach.

How to Assist Consumers After a Data Breach

When signs of identity theft and fraud develop, companies can direct consumers to seek assistance from resources such as their local police, the Social Security Administration, the Internal Revenue Service, the Internet Crime Complaint Center, and the Federal Trade Commission, according to the Michigan Attorney General.  

Consumers also can reach out to the credit reporting agencies and place a credit freeze and fraud alert on their credit files. When a consumer puts a credit freeze on their credit reports, it prevents anyone from opening a new credit account in their name.

With a fraud alert, a lender will have to verify a borrower’s identity before granting any new credit in their name, according to the Federal Trade Commission. 

Other tips for consumers from the Michigan Attorney General include watching out for phishing emails, changing or strengthening passwords, using multifactor authentication on accounts and devices, and reviewing credit reports often.

How to Regain Partner Trust After a Data Breach

Subprime and other lenders whose data gets compromised may find that consumers and partners will lose trust in their company. Lenders may need to emphasize the need for greater security, including cybersecurity, going forward. 

The loss of consumer data can lead to headaches and financial losses, so investing in top security practices is worthwhile especially if it minimizes the chances of a future cyberattack or data breach.

Ken Hill of 700Credit told CBT News that dealership groups, regardless of size, should prioritize education and adopt best practices to lower the risks of becoming the target of a data breach.

How to Regain Consumer Trust After a Data Breach

To regain consumer trust, lenders and other organizations must alert consumers as soon as possible after a data breach is identified. Offering to pay for credit monitoring services for those affected by a data breach is a gesture of goodwill at a difficult time. 

Having a dedicated support line is another way to reach out to consumers reeling from having their personal data compromised by a data breach.

The Bottom Line

A data breach is a stressful event for consumers and lenders alike. Consumers will want to take steps to protect their identity and promptly take steps to report the crime if identity theft has occurred.

Lenders will want to take the important steps of repairing their reputation with partners and consumers. Investing in best practices to prevent a cyberattack or data breach is a worthwhile investment.