Does It Make Sense To Pay For ID Theft Protection?
Thursday, December 27, 2012, 2:00 AM | Leave Comment
With the freely use of technology in every walk of life, we frequently connect to the rest of the world via the great Internet. That has created a huge market for ID theft online and consequently offline as well. What do you have to do to protect yourself and can you really protect your identity ON-and-OFFLine?
You can protect your identity free of charge or you can pay for it. To hire professional help depends on your spending habits and overall level of caution.
You might want to invest in an identity theft protection service if:
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You do lots of online banking or shopping.
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You don’t have time to monitor your information on your own.
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The thought of investing time and money into recovering from an identity theft sickens you.
Before you embark on the journey for identity theft protection, which, at a minimum, is likely to set you back at least $150 a year, consider the no-cost measures you can take to protect yourself.
No identity theft protection is bulletproof, so consider these factors before you choose the right service and buy ID theft protection.
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Help from your bank
Many banks now offer customers daily credit checks that alert them to fishy activity in their accounts. Some will also provide insurance to repay lost wages or legal fees incurred as a result of identity theft or fraud. Other plans assign you a caseworker to help restore your credit.
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Help from your insurer
You can also try to bundle identity theft insurance with your home or auto coverage. Be wary of this kind of insurance, however. These policies can be riddled with exclusions that may prevent you from ever collecting in the event of theft.
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Help from specialty companies
There are the specialty companies such as LifeLock and TrustedID. These are two of the most prominent that market themselves as identity theft protection experts. These companies offer a mix of preventive and reactive tools to maintain your identity and credit, the most common being fraud alerts and credit freezes.
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Help via fraud alerts
Some identity-theft protectors will immediately place fraud alerts on your files with the three main credit bureaus, whether you have been victimized or not. In essence, it forces any bank or credit agency to balk before approving credit requests in your name.
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Help via credit freezes
Freezes are far more effective than alerts. Icing your files prevents any company from accessing your credit unless you already do business with them, effectively sealing your records against any new creditor.
Freezes can be a pain if you are seeking a mortgage or student loan or any form of credit. You will have to contact the bureaus to unfreeze your records, which can take up to three days.
Plus, the credit bureaus normally charge a small fee whenever you freeze and unfreeze your files. Credit freeze rules vary by state.
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Inform proper authority
If you have detected fraudulent activity, notify the financial institution where the fraudulent activity occurred first so they can freeze your account.
Depending on the situation, you will need to file a complaint with the FTC and your local police department, as well as investigate all of your other accounts. And keep a vigilant eye on that credit report.
None of the ID theft protections is foolproof, though. The law only requires the creditor to take reasonable precautions before extending credit. This may only be a speed bump for a practiced thief, so don’t consider it a guarantee that your identity won’t be swiped.
Alerts and freezes are two measures you can take yourself, so consider whether you want to pay a company to do it for you.
In a Nutshell
Remember, despite the hype, the odds of having your identity swiped are actually quite low. But if you are one of the victims of ID theft, then statistics and odds should not matter to you and you will protect yourself on-and-off-line from theft.
