Only weeks after Equifax revealed details of a major security breach to its system, the IRS awarded a fraud prevention contract to the embattled company. The IRS finalized the $7.25 million contract on Sept. 29. In the contract, Equifax would provide verification and validation services for taxpayer identity.
“At first glance it doesn’t make a lot of sense,” said Beverly Harzog, a consumer credit expert and advocate. “Equifax knew about its breach well before they disclosed it, and the IRS knew about the breach when they made the award. I have to think there’s something going on behind the scenes.”
That something is that the IRS felt it had no choice but renew the fraud prevention contract with Equifax.
Did Equifax force the IRS into the fraud prevention contract?
According to the public document on the contract, which posted on Sept. 30, the contract with Equifax is a “sole source order.”
“That sole source order means that this was a no-bid contract,” said Harzog. “The IRS had some reason to believe that only Equifax can provide the verification services it needs.”
Based on the notice of the award, the reason for the sole source order is that the IRS wanted to resolve a protest.
During a hearing before the House Ways and Means Committee on the morning of Oct. 4, Jeffrey Tribiano, the Deputy Commissioner for Operations Support at the IRS said there were plans to award the new fraud prevention contract to another provider when Equifax’s contract ran out at the end of September.
Equifax, who had the contract previously, filed a bid protest in an effort to delay the process. The protest won’t be resolved until October 16, and the IRS can’t move on to another partner until the matter is resolved.
If the IRS hadn’t extended the contract with Equifax, said Tribiano, it would have been without validation services for more than two weeks. This would have left millions of Americans unable to verify their identity with the IRS. The contract has only been extended to cover the gap until the protest is resolved.
IRS suspends Equifax contract over potential new hack
After Equifax’s website was the subject of another potential hack in early October, this one encouraging visitors to download malware, the IRS suspended the short-term contract with Equifax.
“The contract suspension is being taken as a precautionary step as the IRS continues its review,” said the IRS in a statement released Oct. 12.
While Equifax investigates the matter, it has temporarily blocked users from creating new accounts with Secure Access.
Can Equifax still be trusted?
Questions surrounding Equifax’s trustworthiness have been circulating since the public learned of the massive hack that left more than 140 million Americans’ data vulnerable.
“I’d have a hard time trusting Equifax,” said Harzog. She cited some of the missteps along the way, starting with the fact that someone in the company didn’t apply a software patch suggested by the Department of Homeland Security. On top of that, Equifax handled the aftermath of the breach poorly, continuing to charge consumers for credit freezes before backtracking and offering free freezes until November 21, 2017. Equifax even used its Twitter account to send consumers to a fake site about the issue.
In testimony before a Congressional committee last week, former Equifax CEO Richard Smith (who stepped down on Sept. 26) apologized for the not protecting data. He then proceeded to point the finger at personnel who neglected to apply the patch and admitted that subsequent security scans failed to catch the vulnerability.
Despite how anyone feels about Equifax right now, the IRS felt it had little choice but to trust Equifax. Additionally, because Equifax is a major credit reporting agency, consumers have little choice but to hope that Equifax will be more vigilant going forward.
What does this mean for your private information?
In the end, said Harzog, there isn’t a whole lot you can do. “Until all this shakes out, you might want to put a freeze on your credit,” she suggested. “It won’t protect against fraudulent purchases made with a stolen credit card, but it can reduce the chance that a scammer will open a loan in your name.”
Harzog also recommended remaining diligent about your accounts now — and in the future. “I’m checking my accounts every day right now,” she said. “However, we live in a new reality. You will need to remain vigilant. Some hackers will sit on the information for a couple years to wait for the furor to die down.”
As for protecting your tax information? One of the biggest issues with tax fraud in recent years, said Harzog, is the fact that fraudsters can file a tax return using your information first. She suggested filing your tax return as early as possible so you get it in before fraudsters can throw a wrench in the process.
We live in a world that is increasingly vulnerable to information hacks. It’s no longer a matter of “if.” Stay on top of the situation so you can resolve it as quickly as possible when you discover your information is compromised.
This article was updated on Oct. 13, 2017.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|