We’ve discussed credit report monitoring services here before, which help you in a couple of ways. They can keep an eye on your credit standing by monitoring your credit reports: they’ll let you know if your credit has been affected in any way or if you’ve somehow become a victim of identity theft.
Sure, the business of protecting our identities via credit monitoring and other means has offered consumers a way to be proactive. However, I thought to write about a few considerations we should all be aware of before signing up with a fraud protection service like Lifelock or Trusted ID, which are two big names in the industry.
Identity Theft Protection: What To Watch Out For
Your credit card company may have given you a pitch about fraud protection at some point. Or you may have heard about the promises that id theft services can bring you. Peace of mind is what they’re selling. If you’re shopping for such a service, here are some things to take into consideration before you sign up.
1. Read the fine print carefully.
Instead of assuming you’re covered for the worst, make sure you do some research and read the terms, conditions and contract (or service agreement) from any company in the business. For example, are you signing up for a range of services, or just a few items? What actions will the fraud protection company take in the event of a fraudulent charge on your credit card? TrustedID actually has a detailed set of terms and conditions that limits the company’s liability and tells you what’s covered. It helps to read a company’s FAQs and forums if these are available as well.
2. Know the benefits offered by the fraud protection service.
Different identity theft protection companies offer a variety of services. But what is it exactly that you need? Don’t assume that you are covered for any or every incident that happens to you. A chat with a customer service rep might help you clarify when your coverage begins and what the extent of your benefits are.
So what can you expect from such a service? Some of the features include:
- Credit score monitoring
- Your FICO credit score and other free credit scores
- Automatic fraud alerts
- Automatic fraud alert renewals
- Service guarantees or identity theft insurance for up to a certain amount (e.g. $1,000,000)
- Free annual credit reports and monitoring of those reports
- Legal help in case you encounter fraud or have your identity stolen
- Coverage of lost wages
- Removal from mailing lists
- Credit card monitoring
- Lost wallet protection
You may not receive all these services once you sign up with a company. You may be getting just a subset of these features, so make sure you understand what it is you’re getting!
3. Know which credit bureaus are monitored by the service.
While there are three credit bureaus, an id theft protection service might not check in with all of them. Say I sign up with a service that monitors Equifax such as myFICO Score Watch; that doesn’t necessarily mean that they’ll also track my Experian credit score and report. I’d prefer the wider coverage of a service like Equifax Credit Watch that monitors all three bureaus since I’ve lived in various parts of the country over the years (credit reporting by one company may dominate a certain region). Check if the service will monitor all three bureaus for free or for an extra charge.
4. Check with the Better Business Bureau.
It should be easy enough to follow the track records of established companies such as:
- the big three credit agencies: Equifax, TransUnion and Experian,
- identity theft protection service providers like LifeLock or Trusted ID,
- credit monitoring service providers like myFICO.
But how about newer or lesser known fraud protection and credit monitoring service companies? It may be harder to find out how well newer providers handle their customers because of their limited track record. In a way, I’m reminded of warnings to be careful of those companies that promise to fix your bad credit; do some research online and check with the Better Business Bureau to see if the provider you’re interested in has any complaints lodged against it. Avoid any fraud protection company that makes hyped up claims without the evidence to back them up.
5. Evaluate whether you can do the work yourself.
Have you considered monitoring your own credit reports? Is signing up to a service really worth your money? Find out if your budget can handle the expenses of a subscription service over time. You’ll need to decide whether you’d prefer to do all the work of monitoring your credit and watching for signs of id theft on your own time, or pay hundreds of dollars every year to outsource this job. By subscribing to a service, you’re paying for convenience.
Finally, you’d want to know how easy it would be to cancel a service and get a refund in case you do need to trim your finances. I love the idea of having my own ID theft watchdog, but I still need to know how to back away gracefully.
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{ 13 comments… read them below or add one }
The identity theft protection doesn’t work. Most ads imply that they can stop the identity theft from happening, which is false. There are laws that protect you in the event of identity theft, and unless you have so much money that someone could have a field day with your identity in my opinion these services aren’t worth it.
Most ID theft occurs within the home. As in someone you know, likely a family member, stole your credit card. Keep your eyes peeled on your bank statements and simply know what laws protect you from.
RBC tried to get me to sign up for identity theft protection on my Visa, but I really couldn’t see what it offered me beyond what they do already. I’m not responsible for purchases made by a theif if I report it right away, plus they weren’t offering to do any of the work to replace my cards, etc.
Identity Theft is an issue of great concern, but preventing it is nigh impossible if you’re careless. Paying for a service that actually offers you nothing you can not do yourself is just plain silly in my opinion.
You do pay for convenience. Most of the services you mentioned can be replicated by a little work. Sign up for the real free credit reports. https://www.annualcreditreport.com
Legally you can get each of your credit reports once per year. You can get all three at once or you can stagger them so you get a different one every 4-5 months so you can keep an eye on your credit.
Call each of the major companies listed on that site and request a credit lock. I think that is the term they use. It will literally lock your account and prevent anyone from signing up for new credit with any company that checks these services. But remember it will also prevent you from getting a loan as well so make sure to remove it before trying to get a house loan or other type of credit.
Shred your documents. Most ID theft happens in your trash can in front or behind your house. Shred anything that has account numbers, SSN, name and address. Buy a good shredder because all the stuff you get as junk mail needs to be shredded too.
Sign up to be removed from preapproved credit offers. Can’t remember the site that makes this easy but you can google it and find the free places that allow you to remove yourself from mailing lists.
ID Theft prevention starts with good habits and working at it
Don’t be careless.
I don’t need opinions but actual experience from people who had the plan, whose identity was stolen and who used the protection plan and recovery program first-hand. Has anybody tried Identity Theft Shield from PrePaid Legal? If not them, what other identity theft protection program works?
I opted for a free trial from “Identity Truth” a identity theft protection company (I got the info from a trusted site.) The only thing I can find about them now from search engines is their advertisement, not even from any of the computer magazines that ususally review computer related matter. Anyone know of this company or had experience?
You can also read the book, The Silent Crime by Michael McCoy and Stephen Schmidt. They do a comparison of all the different identity theft programs out there and show the pros and cons of each program in the book. The book can be purchased through Amazon.com or your local bookstore.
It cost a lot to provide yourself with good protection, and it’s worth it to enable you to sleep well at night, knowing you’ve shielded yourself against the people who want to steal your name.
haha I like your picture of the Beware of Dog – he’s trying to be mean looking but he’s still cute.
Back to the topic – I don’t think people really need to buy identity theft protection – so long as you’re cautious you should generally be fine.
Excellent tips. Protecting your finances is doubly important during a down economy.
Keep in mind also that Lifelock is currently being sued by three attorneys general and Experian.
Lawsuits happen all the time. I worked at companies that were constantly being sued left and right and it did not exactly affect business that much. Not to minimize any outstanding cases, but we’ll just have to see how it’s resolved; but I don’t think it would affect consumers much. These companies can be pretty resilient overall.
There are some precautions we can all take to avoid these types of situations. There are some free resources that allow online consumers to prevent the transmission of their personal information online while still managing to make online transactions. The percentage rate of this issue increases every year, and no one is beyond having it happen to them. I know a few people it’s happened to, so it kinda hits home. But the worst thing about this is that people use that creative energy to steal identities as opposed to finding ways to create successful business ideas and brand their own.
Well, great post nonetheless!