The last time I saw my friend, several years ago, she and her husband were rebuilding their credit after bankruptcy, so I was thrilled when she reached out to me recently to give me an update. Their credit is solid, and life is good.
But now that they’ve worked so hard to build good credit, they want to make they keep it that way. “We want to subscribe to an identity theft protection service,” she asked. “What do you recommend?”
An ID theft protection service is one of those things you hope you never need, but if you do, you’ll be glad you have it. However, not all are the same, so you’ll need to choose carefully.
These services usually offer three main benefits:
- Credit monitoring
- Identity theft insurance for out of pocket costs and/or
- Identity theft resolution assistance
You may need all — or none — of these features, so assessing what your goals are is the first step in choosing one of these services.
First, though, it’s important to note to note that no service can completely “protect” you from identity theft. Unfortunately, there are myriad ways your information can be compromised; a lost or stolen wallet, a hacked your smartphone, a data breach, or even Dumpster-diving, to name a few. But these services can make it faster and easier to recover if you are a victim.
Let’s look at the three features you may want in one of these services.
These programs may offer various levels of credit monitoring such as daily, monthly or quarterly monitoring of your credit reports from one, two or all three major credit reporting agencies. You’ll be alerted if certain items change. In addition, you may get free credit scores from one or all of the major credit reporting agencies.
Some services also extend monitoring to other personal information, such as your Social Security number or certain online activities.
Not quite ready to shell out a monthly fee a subscription service? There are things you can do on your own. You can get free credit reports annually from each of the three major credit reporting agencies. You may also be entitled to extra copies if you are a victim of fraud or live in a state where more copies are free under state law.
You can also use a service like Credit.com’s free Credit Report Card to monitor your credit score each month. If your score changes dramatically, you’ll know you need to dig deeper to find out what’s going on.
Questions to Consider:
- Will I get my credit scores? How many? How often?
- Will I be alerted to changes? How often?
- Is other personal information be monitored as well?
- Are any copies of my credit reports included?
Identity Theft Resolution Services
Having your identity stolen is scary — and stressful. What would you do if it happened to you? Would you know what steps are required to clear your name — and would you have the time and wherewithal to take them?
If not, that’s where professional identity theft resolution services may be helpful. You will work with someone who knows the process and can make sure you take the right steps.
Before you sign up, though, read the details of the coverage carefully to make sure you understand what you will be getting. Some companies will do much of the work for you, while others will just provide advice.
In addition, you may also want to check if this benefit is already available to you through your employer, homeowner or auto insurance company, bank or credit union, or another organization to which you belong.
For example, more than 17.5 million Americans have access to the fraud resolution services provided by IDentity Theft 911 because it’s a benefit provided by the groups they belong to, or the the financial services companies they use. You may be one of them.
Brett Montgomery, IDentity Theft 911 fraud operations manager, says “Consumers don’t have to wait until they’re victims of identity theft to tap our expertise. We offer consultations on how to protect their personal information to ward off identity thieves. When victims call for help, they’re often anxious and frustrated. Our case managers encourage them to share their stories and victims relinquish control of the identity reclamation process only when they are ready.”
Questions to Consider:
- Do I need guidance, or someone to do the work for me?
- Which level of service will I get from this provider?
- Am I already covered for this?
Identity Theft Insurance
Typically these services cover ID theft-related expenses such as out-of-pocket expenses; legal costs; lost wages; travel (if needed to clear your name); or the cost to care for your spouse, child or elder care needed while resolving your problem. It may even cover the services of a private investigator, if needed.
If you are a victim, these benefits may come in handy, though fortunately most consumers won’t need the full $1 million in benefits these programs often offer. The average victim incurs $631 in out-of-pocket costs and spends 33 hours resolving the problem, according to Javelin Strategy and Research.
Think for a moment about what you might need if you are a victim. If you work full time and would not get paid while you take time off to talk with banks or credit card companies, credit reporting agencies and law enforcement, for example, then coverage for lost wages would be important to you. But that coverage wouldn’t be necessary if you were retired, for example.
Questions to Consider:
- What expenses would I need covered?
- What expenses are covered?
- Is there a deductible?
Again, you may already have this coverage through another source such as your employer or insurance company, so you may want to check there first.