Choose Identity Theft Protection

Identity theft occurs when someone uses your personal information, such as your social security number, to open credit card accounts, purchase things, drain your bank account, or even file income taxes. In 2012 more than 12.6 million people reported that they were the victims of identity theft. Given the dramatic increase in identity theft, a number of businesses began offering services to protect against these crimes. These services range from credit monitoring to helping people rebuild and reclaim their identity after theft. While some people may feel most comfortable paying someone else to protect their identity, there are also steps that everyone can take to protect their own identity.

Steps

Choosing Identity Theft Protection

1. Read online reviews. If you performed an internet search for “identity theft protection,” a number of companies would be listed in your search results. While you may not know which company to choose, consumer agencies and other groups have evaluated and reviewed these companies. You should begin the process of choosing identity theft protection by reading a number of reviews and then by choosing several companies to look at more closely.
   • You can find reviews at: http://www.consumeraffairs.com/privacy/ and http://www.fool.com/investing/general/2015/06/12/who-really-offers-the-best-identity-theft-protecti.aspx.
   • Some of the top ranked identity theft providers include: LifeLock; Privacy Guard; Equifax ID Patrol; Protect my ID; Identity Guard; Identity Force; and ID Shield.
2. Compare identity theft protection services. Companies specializing in identity theft protection may offer numerous services that you can purchase. You should read the website for each company that you have chosen to look more closely at and do a side-by-side comparison of the services that each company offers, as well as the cost of those services. This allows you to examine what services may best meet your needs and what services you can actually afford. Services are typically bundled together for a monthly price and may include:
   • Credit monitoring to ensure that no new accounts have been opened in your name. If you are concerned about a data breach or you want monthly checks, this service may be good for you.
   • Replacement services, that assist individuals in acquiring new driver’s licenses or passports after an identity has been compromised. If you were burglarized or you lost your wallet, the service may be helpful.
   • Reimbursement for stolen goods caused by identity theft.
   • Identity theft insurance, which includes support from service agents or attorneys to assist you in recovering from identity theft. If you are concerned about a data breach that included an identity thief gaining access to your personal information, this ongoing insurance may be useful.
   • Lost wages reimbursement for time that you needed to take off of work to deal with identity theft.
   • Services to safeguard your personal information from identity thieves, including computer software to protect your computer from being hacked or online services to minimize the dissemination of your personal information. These services may monitor the dark web for someone selling your information, which may occur before you are aware that your personal information has been stolen.
   • Services to help fix problems caused by identity theft, such as blocking errors to credit reporting agencies and businesses.
3. Evaluate identity theft protection companies’ websites. Once you have narrowed down the list of services that you want to purchase and companies that offer those services. It is very important to closely scrutinize the content of each company’s websites. A number of these businesses have been shown to use exaggerated or misleading content to lure unsuspecting consumers into purchasing unneeded services. When evaluating a company offering identity theft protection, look for the following:
   • Avoid companies that state or imply that they can completely protect you from identity theft. There is no company that can provide this guarantee truthfully.
   • Avoid providers that only stress the worst-case scenario. While there is a significant threat of identity theft, not everyone will become a victim and even if your identity is stolen, you may be able to manage the consequences.
   • Avoid providers that do not clearly provide information about the company.
4. Select a company that clearly identifies which sources it monitors. It is important for you to choose a company that clearly states the sources it will examine during credit monitoring. You want a company that is monitoring all three major credit bureaus, Experian, Equifax, and TransUnion, as well as other public records sources and websites. The company should also state how often it monitors these sources.
   • Choose a company that describes why monitoring particular sources actually helps or protects you. The description should explain what information these sources provide, what types of activity may indicate identity theft, and how you will be notified about suspicious activity.
5. Review the company’s pricing plan. A good company will provide you with the cost of each service before asking for your payment information. Most companies will provide tiered protection, which means that as you are willing to pay more money, the company offers you additional services. You should be suspicious of any company that does not clearly identify the pricing for each service.
6. Review the guarantees or insurance offered by identity theft protection. Carefully review all guarantees or insurance to see what is actually covered by the policy and whether there are any limits on the policy. A 1 million dollar coverage guarantee will only help you if your type of loss is included.
   • You should also review each company’s privacy policy to see how the business collects your personal information, what information they may share with other companies and for what reason, and what control you have in limiting how your information is used.
   • If a company does not have a clearly stated privacy policy you may want to use a different provider.

Providing Your Own Identity Theft Protection

1. Take steps to protect your identity. Although identify theft can happen to anyone, there are steps that you can take to minimize your risk. Most importantly, you can be aware of documents that contain your identifying information and make sure that you dispose of these items appropriately. When taking steps to protect your identity, consider the following:
   • Review your credit card and bank statements carefully and often to check for transactions that you did not make.
   • If you receive bills in the mail, be aware of when the bills generally show up. If the bill does not show up, someone may have taken it to gain access to your personal information.
   • Make sure all of the claims paid by your health insurance company match appointments or treatment that you or your family received. Identity thieves have been known to place themselves on someone’s health insurance policy.
   • Shred all documents with personal identifying information and financial information before discarding them.
   • Review your three free credit reports at least once a year. You can access your free credit reports at: https://www.annualcreditreport.com/index.action.
2. Monitor your credit reports. If you cannot afford identity theft protection or you choose not to purchase identity theft protection, there are a number of steps that you can take to provide your own identity theft protection. One of the most important steps is to routinely monitor your credit reports. You are entitled to one free credit report a year from each of the three major credit reporting bureaus, Equifax, Experian, and TransUnion.
   • In order to maximize your free protection, you should request one report every four months. This way you can use your three free reports to monitor the entire year.
   • You can request your free credit reports at: https://www.annualcreditreport.com/index.action.
   • You are entitled to an additional free report from each agency 90 days after you have placed a fraud alert on your credit file. You want to place a fraud alert if someone has stolen your wallet or social security card, or if you were notified of a data breach that included your personal identifying information.
   • If you believe that your minor child may be the victim of identity theft, you can request a credit report using the child’s social security number. The credit bureaus may have specific instructions for you to follow when running a report on a minor child.
3. Consider placing a credit freeze. If you believe your identity information has been compromised, you can place a credit freeze with the credit bureaus. This makes it much harder for someone to open an account in your name because all companies run credit checks before offering a line of credit. The credit freeze prevents these checks and most companies will not provide a line of credit without a credit check.
   • If you want to open a new line of credit when a freeze is in place, you will have to follow the instructions from each credit bureau on how to temporarily lift the freeze.
   • You should consider placing a freeze if someone gained access to your social security number.
   • You can also place a credit freeze if someone gained access to your minor child’s social security number
4. Utilize free credit monitoring. If your bank, insurance company or credit card offers free credit monitoring you should take advantage of the program. Often these institutions will run monthly credit reports and email you updates as to whether there was an activity through the credit agencies. You should still pull your own credit reports for each credit bureau once a year since these free monitoring services sometimes only use one credit bureau.
   • You can also download free apps for your smart phone, such as Credit Karma, that provides free credit monitoring.
5. Change your passwords and login information. If you believe that someone gained access to your login and password information you should immediately change your password and your username, if you are able. If the website contains any financial information, such as a saved credit card, you should review your credit card charges and notify your credit card company of a potential breach.
6. Review credit card and bank statements regularly. You should regularly check your bank and credit card statements to make sure that no one misused your card. If you find a suspicious transaction, you should contact your bank or credit card company immediately.
   • You may be issued a new card.

Determining Whether You Need Identify Theft Protection

1. Determine whether you already have identity theft protection. Some banks and credit card companies offer their customers free identity theft coverage. This coverage may include monthly credit monitoring, which is when the bank checks to see whether any new accounts were opened in your name or if anyone ran a credit check on you. Call your local bank and credit card company to see whether they offer this service for free and if so you should sign up for the program.
2. Understand the types of identity theft services. If you are contemplating purchasing identity theft protection, it is important for you to be a knowledgeable consumer so that you aren’t taken advantage of by unscrupulous businesses. Identity theft protection can include a number of services, such as:
   • Credit monitoring to determine whether someone fraudulently opened an account in your name.
   • Monitoring of black market websites to see whether someone is attempting to sell your identity information.
   • Assist in cancelling credit cards and replacing lost or stolen identification.
   • Reduction of pre-approved credit card offers to minimize the risk that someone will take the offer and open an account in your name.
   • Insurance or a monetary guarantee that if you do become the victim of identity theft, the company will work to restore your identity.
   • Freeze or lock your credit report so that no one can access your identifying information without your knowledge.
3. Recognize the warning signs of identity theft. There is no identity theft protection company can truthfully guarantee that it can completely protect you from identity theft. It is important that you not only take steps to reduce your risk but also be aware of the warning signs that your identity may have been stolen. These signs include:
   • You receive a notice from the IRS that more than one tax return was filed in your name.
   • Your health insurance notifies you of a denial in coverage for a condition for which you did not seek treatment.
   • There are withdrawals from your bank account that you did not make.
   • Businesses refuse to take your checks to pay for goods.
   • You receive calls from debt collectors for items that you did not purchase or accounts that you did not open.
   • You receive bills for services that you did not use.
   • There are unfamiliar accounts listed on your credit report.
   • You were notified by a company that there was a data breach and that someone may have gained access to your personal identifying information.

Tips

• The U.S. government provides numerous resources for people trying to prevent or recover from identity theft. You can find this information at: https://www.identitytheft.gov.
• If you are concerned that someone may be trying to fraudulently file income taxes using your social security number and name, try to file your taxes as early as possible. The IRS will reject a second tax return filed in your name and notify you if someone tries to do so.
• Never give your social security number or other identifying information out over the phone, even is the person calling says they are from the IRS or other government agency.
• One of the major "costs" of identity theft is the time that you will spend trying to clear your name. Though a protection service may work for you, it is still necessary to be vigilant on your own behalf.
• Reputable protection services should provide clear disclosures about cancellations, costs, customer resolution processes, and refund policies.

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References

See also

• Avoid Becoming a Victim of Identity Theft

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