The Pros and Cons of Identity Theft Protection

There are three main advantages of using identity theft protection services.

• They perform ongoing monitoring of improper usage of your identity. They check credit reports from the three major credit bureaus every day and notify you if they detect any changes. Most plans include monitoring of unauthorized usage of your Social Security number, credit cards, debit cards, and even suspicious loan activity that can cost you serious money. Often, an identity theft protection service also examines property records, postal address databases, and other public records to track any signs of identity theft.
• Theft protection services reimburse you in situations involving monetary loss due to identity theft. Reimbursement can cover thousands of dollars in losses all the way up to one million or even more.
• In case of identity theft, these services will quickly assign a fraud resolution specialist who will work towards repairing any damage due to identity theft.

Consumer advocate groups have raised serious concerns about identity theft protection services, indicating that the services are expensive relative to the level of protection they offer. There are three main disadvantages of using such services.

• Identity theft protection services often cannot track many forms of identity theft, such as if a person applies for a job under your name or uses your information to obtain a cell phone.
• These services often fail to protect you from the initial identity theft, and can only take action after your identity has been stolen.
• Some contracts contain confusing language, and reimbursement may not cover certain financial losses, such when someone purchases items using your identity. So review an offer carefully to ensure you know what you’re paying for.

Despite these disadvantages, some people find that the price of identity theft protection is worth it, both for the actual protection it provides and the sense of security it offers. Identity theft protection services are available from the three major credit bureaus, which include Experian, TransUnion and Equifax. Additionally, a number of private operators such as banks and credit unions offer similar services. The cost is usually between $10 and $15 per month, but prices can vary significantly.

Identity theft is a crime in which a criminal steals another person’s vital information, such as a social security number, address, driver’s license or insurance information. The criminal then uses this information for financial or personal gain. Unfortunately, many people do not realize their information has been compromised until after the damage is done.

There are many reasons why a criminal may steal someone’s identity. These are some of the most common identity theft cases:

• Financial Identity Theft – A criminal will steal another person’s credit card or bank information to make unauthorized purchases. An identity thief also will steal a person’s identity to open up a new credit card, bank account or loan in that person’s name.
• Medical Identity Theft – In these cases, the criminal uses the person’s insurance information to obtain medical services for free or at a reduced rate. Due to governmental privacy laws, these cases can be very difficult to repair.
• Benefits Identity Theft – A person’s stolen identity also can be used to apply for governmental benefits, such as social security and public assistance.
• Income Tax Identity Theft – Criminals also steal people’s identities to file for an income tax refund using the person’s information.
• Employment Identity Theft – Employment identity theft is primarily committed by illegal immigrants, those with a prior criminal record or those who want to steal someone’s credentials.
• Criminal Identity Theft – This type of identity theft occurs when a person uses your personal identification when dealing with the police.
• Minor Identity Theft – Identity thieves sometimes target those under 18 because they have no bad marks on their credit and because minors rarely check their credit history.

No matter how careful you are with your private information, there is always a chance that your identity will be stolen. The important thing is that you know what to do if your identity is stolen. There are several steps you can take immediately to minimize the impact of identity theft in your personal and financial life:

1. Contact Agencies – The first step is to contact the financial institution, lender, insurance company or governmental agency connected with the identity theft. Explain exactly what happened and what charges are not yours. You should also contact all other financial institutions and lenders to warn the about possible fraud on your accounts.
2. Track Everything – It is crucial that you document everything involving your identity theft, including fraudulent charges and correspondence about those charges. Check your accounts daily and record any questionable behavior.
3. Request a Fraud Alert – Contact one of the three main credit reporting agencies, including Equifax, Experian and TransUnion to request that a 90-day Fraud Alert be put on your account. You also are entitled to a free copy of your credit report with this request.
4. File Report with FTC – The Federal Trade Commission takes identity theft very seriously and investigates all types of reports. You can file an Identity Theft Affidavit by calling 1-877-ID-THEFT or at ftccomplaintassistant.gov.
5. File Police Report – The FTC may require you to file a police report in your jurisdiction. Even if they don’t, you should always contact your local police department.
6. Contact Governmental Agencies – You should also check with the Social Security Administration, Internal Revenue Service, Department of Motor Vehicles and the United States Postal Service to check to make sure your information at these agencies has not been modified or compromised.

When looking for an identity theft protection service, you want to consider several factors, including costs, resolution services, identity theft insurance protection, monitoring services and customer service. Here are some of the most common identity theft protection companies:

LifeLock 

As one of the premium identity protection companies, LifeLock offers several package options, $1 million recovery insurance, full ID recovery services and regular status updates. It also is one of the only companies to monitor black market websites as well. You can learn more about Lifelock here.

IdentityForce

With more than 35 years of experience, IdentityForce offers comprehensive protection services for both adults and children. They provide a $1 million identity theft insurance policy, and their Identity Health Score helps you evaluate your online risk.

TrustedID 

In addition to standard identity theft protection services, TrustedID offers customized solutions for individuals, families and businesses. The company maintains an A+ rating with the Better Business Bureau and provides customer with first-hand access to identity theft recovery specialists.

IDWatchdog

This is one of the only identity theft protection companies that will provide recovery assistance even if your identification was stolen prior to signing up for their services. They also offer complete fraud monitoring and protection services, and their representatives are available 24/7.