Shopping for Credit Protection
If you don’t have the time or inclination to send for your free credit reports, take yourself off of mailing lists, or otherwise take steps to protect your identity, you can still purchase peace of mind. Identity protection is big business, and there are many companies—some legitimate, some less so—that claim to protect your identity. If you decide to hire one of them, you need to know what they can do for you.
The Essentials: What You Get For Your Money
Every credit protection company offers a different slate of services. Before you decide on the right one for you, determine which services you need.
• Account Monitoring: Most all credit protection companies provide monitoring of your credit report. They will obtain the free reports that the credit rating agencies must, by law, provide you with every year, and most will look at your credit report with great frequency, even daily. If they see any suspicious activity they will notify you immediately, giving you the chance to catch problems early. Some companies will even monitor your bank and credit card accounts to ensure that all activity there is legitimately yours.
• Credit Freezing: This service involves a lockout of your credit, a freeze that keeps anyone—including you—from accessing your credit history. When you apply for a loan or otherwise need access to credit, you must call the company to unlock your file. You will often pay extra for this service, but it is among the most powerful identity protection tools around.
• Internet Monitoring: Some companies employ sophisticated electronic techniques to troll the Internet for your personal information, determining whether it is being passed around on disreputable Web sites or making its way into illicit databases. If they do detect your information out there, they will alert you and help “lock down” your personal information.
• Public Records Searches: A few firms will monitor court records, post office filings, alias changes, and even sex offender registries to make sure that no one is using your personal information fraudulently within the public sphere (e.g., registered as a sex offender with your address, using your Social Security number in conjunction with a new identity or name, etc.).
• Identity Recovery Resources: If your identity is stolen, these companies will assist you in mitigating the damage—contacting creditors on your behalf, disputing charges on your credit report, even helping to replace the contents of your wallet should it be stolen. Further, they often provide a monetary guarantee if your identity is stolen on their watch, though you must read the fine print to see just what that payout will cover.
Price vs. Service
Credit protection services run from the quite inexpensive (less than $5 per month) to four or five times that amount. Granted, you will probably get more services included with a more expensive fee, but you may be paying for more than what you need. If you are already taking steps to protect your identity, paying someone else to do the same job is a waste of money. Make sure the company you choose is covering only the bases you are not.
Dangers of Credit Protection Scams
As mentioned above, along with all the legitimate credit protection firms, there are a number of credit protection scams designed to take advantage of consumer fear. Here are a few ways to avoid such rip-offs:
• Never respond to a credit protection offer that comes via email. The chances are too high that it is spam, and that rather than offering you a service, the message is simply a lure to infect your computer or attain personal information.
• Offers of free credit reports almost always involve a bait and switch. You may get a free credit report (which you can get on your own very easily) but you’ll also get a monthly bill you didn’t anticipate when the company in question starts billing you for credit monitoring the next month. If you want the company’s services, you are entitled to pay for them; just be sure to read the fine print, and remember that no one asks for your credit card information unless they intend to use it.
• Be sure you understand any ID theft insurance the company in question offers. In other words, just because a firm offers $1 million to victims of identity theft doesn’t mean that you will get that money if the worst happens. Anyone can say they will pay you if your identity is compromised; a massive list of loopholes will render the coverage useless, however, and leave you out not only what the identity thieves have stolen, but all the money you’ve given to your “protection” company.