Everyone these days knows about identity theft. It’s as though every month, a new report is published about some major data breach in some part of the world.
It is not surprising to know that a thriving industry has actually come up to help protect individuals from being the victim of identity theft. The services are however quite expensive and consumer organizations tend to argue that the actions they undertake are the kind which everyone can carry out on their, for free of course. If you lack the time and energy, you may not want to burden yourself with doing so which is why it is best to opt for the services of a professional to help you unravel such a mess.
The following are some prevention services that are being marketed for identity theft prevention along with questions you should ask when considering them.
ID theft insurance typically costs around $25 to $60 annually and is offered as a ride to homeowners. It however does not protect you from being a victim in the first place and neither does it cover any monetary losses which may be a result of the identity theft. All it does is that it reimburses the costs which are associated with claiming your financial identity back for example making copies, phone calls, hiring an attorney, mailing relevant documents or the loss of wage while pursuing a solution.
The questions you should ask when considering this kind of insurance is what the limits of the policy are; is there any deductible; if lost wages are also covered, what are the limits and how does this coverage get triggered; if legal fees are also covered, what are the limits and should the insurer approve it from before for it to work and how much of personalized assistance would be provided i.e. will a case manager be appointed to make decisions on your behalf or would you simply be given the steps to follow?
Credit monitoring services however track your credit reports and will contact you when any key change takes place; things such as the opening of a new account under your name, changes in your address, increase in credit limits or credit inquiries for example. This costs around $10 to $30 per month and services include the following:
- Some monitor and provide credit reports from all major credit bureaus whereas some only track one
- Plans which are more expensive provide further services which include monitoring of public records, computer protection programs such as keystroke encryption software and black market website surveillance
- Some do provide one or more than one low cost or free credit scores
- What you should keep in mind when you are considering opting for credit monitoring:
- A number of creditors give out information to all 3 credit bureaus while some only give it out to 1 which is why your 3 credit report may have different information
- Due to lenders reporting activities to credit bureaus on a monthly basis, it is likely that it would take some weeks before any fraudulent behavior is spotted by your monitoring service
- Ask how you would be notified if any flagged changes are found i.e. via email/mail or text and how frequently you would be informed
- You can also order a free copy of every credit report from AnnualCreditReport.com every year however if you stagger them, you could get a different report every 4 months
If you are aware or are fearful that your account has been compromised but you do not wish to fully block off your access to credit reports through a credit freeze, you can place a free 90 day initial fraud alert with 3 of the credit bureaus. This would mean that the businesses would have to verify your identity prior to opening any new accounts.
The alert can be renewed after the 90 day period. If you do not want to remember to do so, some monitoring services will file the renewal for you free of charge.
The bottom line is that either you monitor your credit on your own which is a free but time consuming task or you give the task to a third part who will do it for you but charge you a few hundred dollars. Whichever option you choose, make sure you get the job done.