Privacy Rights Clearinghouse
The Teale Data Center for the State of California has reported a security breach in the data base that holds payroll deduction information for all state government employees. According to news reports, officials for the Data Center are quite certain that data was not removed, although they are not entirely certain. One of the data elements in the data base is employee Social Security number (SSN). The incident apparently occurred in April 2002.
Because the Social Security number is the key piece of data used by identity thieves to commit credit and banking fraud, the Privacy Rights Clearinghouse strongly encourages state employees to obtain free copies of their three credit reports right away. We also encourage state employees to place fraud alerts on credit files if the reports show signs of fraudulent activity.
Information on how to contact the three credit bureaus - Equifax, Experian and Trans Union - is available from the California Office of Privacy Protection, at: http://www.privacy.ca.gov/stateemployee.htm 
The web site of the California State Employees Union has additional information on the Teale Data Center security breech.
The most cautious and proactive approach to take is to place fraud alerts on your three credit reports immediately, even if you have not yet seen copies of your credit reports. Why? If employees' SSNs have been obtained by a hacker, it may be some time before they are used to commit credit fraud.
Data Center officials are quite certain that employee data was not obtained by the hacker, and that is good news. But if you want to take the most cautious approach, you can place fraud alerts on your three credit reports now. The Office of Privacy Protection web site has instructions on how to do that.
When you establish a fraud alert, you will add a statement to your credit report that says, "Contact me at [your phone number] to verify all applications for credit." If someone other than you attempts to open a credit account, the credit issuer is supposed to heed the fraud alert and call you before extending credit. This is not foolproof, but it stops many such attempts.
You, too, will have to be called by a credit issuer before you can obtain credit. This means that if you are shopping for a new computer on a Saturday afternoon and decide to open up an instant credit account because you can get 10% off the sale price, you will not be able to obtain credit immediately. But if you are not in the market for instant credit, the fraud alert should not be a deterrent to obtaining credit, such as an auto loan, a credit card, or a mortgage. You can cancel your fraud alerts at any time.