October 10, 2014
You'd have to be living under a rock not to be concerned about identity theft. It seems like every other month there's a new report about another massive data breach somewhere in the world.
Not surprisingly, a thriving industry has sprung up around helping to protect consumers from identity theft. Most of these services are pretty expensive and many consumer organizations argue that they merely take actions you could easily carry out yourself for free. But if you don't have the time or wherewithal, you may want to enlist a professional to help unravel the mess.
Following are some of the identity theft prevention services being marketed, as well as questions to ask when considering them:
ID theft insurance is commonly offered as a rider to homeowners or renters insurance and typically costs $25 and $60 a year. Note: it doesn't protect you from being victimized in the first place nor does it cover direct monetary losses resulting from identity theft. Rather, it reimburses costs associated with reclaiming your financial identity (e.g., phone calls, making copies, mailing documents, wages lost when pursuing resolution and hiring an attorney).
Questions you should ask:
Credit monitoring services track your credit reports and contact you whenever key changes occur – things like new accounts opened in your name, address changes, credit inquiries and increased credit limits. They usually cost from $10 to $30 a month and services provided are all over the map. For example:
Keep in mind when considering whether to buy credit monitoring:
If you know – or fear – that an account has been compromised but don't want to fully block access to your credit reports through a credit freeze, you can place a free, 90-day initial fraud alert with the three credit bureaus. This means businesses must verify your identity with you before opening new accounts.
You can renew the alert after 90 days. If you don't want to be bothered remembering, some monitoring services will file your renewals for a fee.
For more tips, see the Federal Trade Commission's "Privacy and Identity" page at www.consumer.ftc.gov/topics/privacy-identity.
Bottom line: Do you want to monitor your own credit (which is free but time-consuming) or hand off the task to a third party and pay hundreds of dollars? Either way, make sure it gets done.
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