Missing Student Loan Debacle can Seriously Harm Canadians’ Credit
Back in January the federal government came forward saying that an external hard drive containing information regarding 583,000 student loans went missing. The government is now contacting all of those affected, Canada Student Loan borrowers that took out a loan between 2000 and 2006. Now, with the data still missing, each of these borrowers is vulnerable to things like identity theft and fraud until their lost personal information is found once again.
“I want all Canadians to know that I have expressed my disappointment to departmental officials at this unacceptable and avoidable incident in handling Canadians’ personal information,” Diane Finley, head of Human Resources soon after the loss was announced. She said at the time that her department was doing everything they could to ensure that nothing like this would ever happen again, and that new policies – such as banning external hard drives and better training of employees handling sensitive information – were already being put in place.
Those solutions may be of little comfort to those who are now concerned about what the loss of that personal information will do for their credit history in the future. And in fact, some of the government’s other measures being put into place are being heavily questioned, as it seems those may actually further hurt the credit stability of Canadians.
One of those proposed government solutions is to offer a credit report monitoring service through Equifax. This service would flag the accounts of Canadians affected by the breach, and would track and monitor those accounts for the next six years. If there is any fraudulent or seemingly inaccurate activity on those accounts, the monitoring service would pick it up and report it.
Some say, this service just isn’t good enough and won’t adequately protect Canadians from identity theft and other types of fraud.
One reason is because, as Canada Credit Fix President Sheldon Wolf points out, this flagging system could make the individual’s account look worse than it is to other lenders and creditors. When they see that the account is flagged, they could mistakenly think that it’s for the wrong reasons, and deem the individual a credit risk because of it.
The other problem is that the government did not outline any such steps or measures it would take with TransUnion, the other credit reporting agency in the country. Because these two competing organizations work with different data, making sure that one base is covered and not the other is essentially leaving the job only half done.
Wolf’s solution was to offer, through the Canada Credit Fix organization, credit protection and restoration to individuals affected by the breach a discount that would essentially have them paying for the service at cost. Wolf has sent this plan to Ms. Finley.
Do you think that either Wolf’s plan, or the government’s, is enough to protect the individuals’ credit history and personal and financial information? What, if anything else, do you think should be done?