Is Identity Theft Protection Worth Your Money?
You have definitely heard of ID theft protection. It’s a big business these days. At first glance, some people might think ID theft protection is a great idea and a good investment. Others might see it as throwing their money away. So, is it worth your money? I think so.
The Job of an Identity Theft Protection Company
First, you should know that just because someone is monitoring your credit, they aren’t actually stopping a bad guy from stealing or using your financial information. These companies watch your credit report and alert you if there are any new accounts or credit inquiries. In some cases they monitor your Social Security number on new applications for credit and in real time alert you that an attempt is being made to establish credit. This can be helpful, as you can take care of the situation quickly should someone attempt to steal your credit.
These companies also might offer extra services like monitoring your Social Security number on the dark web, bank account activity, or even watching for medical identity theft. Maybe the most important aspect of these services are a “restoration” component where an agent will work on your behalf to fix a stolen identity. Though this is great, is it worth the $10-30 or more a month that you might pay? For most people, I think so.
Can Do It on Your Own?
If you have already been a victim of ID theft, or your identity has been compromised in another way, you can still certainly do all of the basic things these companies offer on your own, but you are at higher risk. If you are a victim of ID theft, you should consider these services, indefinitely.
If you are not yet a victim, you want to be proactive in protecting yourself. Should you consider these services, I think so.
Meanwhile, for the do-it-yourselfers, there are many websites that allow you to peek in on your credit report and track your credit score. If you see something wrong, you can report it for free at IdentityTheft.gov. But, frankly, I’m not sure how much that will help you. There are also resources on that website that help you recover. The Identity Theft Resource Center at www.IDTheftCenter.org can help too.
You should also consider freezing your credit. This is something you have to do on your own anyway, as the ID theft monitoring companies can’t do this for you. There is a small charge to do this, usually free to $10, and it’s a one-time fee, not a monthly payment. Once you freeze your credit, you are usually pretty safe.
If You Choose the ID Theft Protection Service Route…
Generally, if you freeze your credit and monitor your credit report, you are doing a good job in protecting yourself. However, for some people, as mentioned above, it still might be a good idea to get the ID theft monitoring. If you want to do it, make sure that you are comparing prices and coverages before you buy. Also, make sure that you are using a service that monitors all three major credit bureaus. It’s also a good idea to stay away from the services offered from credit card companies. Usually, they are very bare bones services.
Other Ways to Keep Your Identity Safe
There are plenty of other things that you can do to keep yourself safe if you elect not to purchase credit monitoring.
Dispose of Your Mail in a Secure Fashion: One thing you can do to keep your information safe is to shred your mail. This greatly cuts down on the chances that an ID thief will get your information. Just keep in mind that companies that have your information, like your bank or even your cell phone provider, might not be as careful about this. So, it can still end up in the hands of thieves.
Opt Out of Junk Mail and Pre-approved Credit Card Offers: You can also choose to opt out of junk mail or pre-approved credit card offers. You can do this at OptOutPrescreen.com. This gets rid of most, but not all, junk that finds its way into your mail box.
Check Your Credit Report: Always check your credit report. You can get a free report every year at AnnualCreditReport.com. Just keep in mind that this doesn’t stop someone from taking your information, but it can tell you if someone has stolen your identity thanks to fraudulent charges, unfamiliar credit card accounts, and the like.
Get Fraud Alerts: It’s also a good idea to set up fraud alerts. Just again, realize that these don’t stop thieves from getting your information. They just tell you if there is possible fraud on your accounts. Also, these generally expire after 90 days, so you have to keep renewing the service.
Freeze Your Credit: Again, this is very important. It is one of the basic stepping stones of protecting yourself against identity theft. However, there is a caveat here, too. Freezing your credit won’t protect your identification from things like account takeovers, medical identity theft, tax-related ID theft or criminal ID theft.