Hackers are just itching for the next chance to steal a company’s data and pounce on your most sensitive financial secrets. With this in mind, it would be comforting to know that someone has your back. Credit monitoring services promise to safeguard your personal information from such criminals. Typically, these services offer around-the-clock monitoring of your credit reports and quick warnings about potentially fraudulent activity.
For example, these services issue an alert if someone tries to open a credit card in your name. More extensive monitoring through an identity theft protection service is also available. In addition to monitoring your credit, this type of service scans public records and the so-called dark web to make sure your information is not fraudulently displayed.
Signing up for credit monitoring or identity theft protection can make sense under the right circumstances, says Susan Grant, director of consumer protection and privacy at the nonprofit Consumer Federation of America. However, she cautions you not to expect too much. “It’s of some value if you are a victim of identity theft, but its value is rather narrow.”
Who Offers These Services?
Some companies that offer credit monitoring and identity theft protection services include IDShield, IdentityForce, IdentityGuard and LifeLock. These services charge fees typically ranging from less than $10 to $30 or more a month.
Other companies — including Credit Sesame and Credit Karma — promise free credit monitoring along with your credit score, although their services may be more limited. For example, they won’t pull information from all three of your credit reports under the free service.
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Even the three major credit reporting agencies — Equifax, Experian and TransUnion — offer a mix of free or paid credit monitoring and identity theft protection services. They include programs like Experian CreditWorks, Equifax Complete and TransUnion TrueIdentity.
Who Should Use These Services?
These services offer true value to some consumers, says Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center. “The biggest advantage primarily is that you are paying for time and expertise,” she says.
Credit monitoring and identity theft protection are particularly useful for busy people with demanding jobs or family concerns, Velasquez says. Such consumers might not have the time to monitor their accounts closely and thus are willing to pay someone else to do it. “The best candidate is somebody who really feels they have more money than time,” she says.
Investing in these services also might be right for anyone worried that their information has found its way into public databases or the dark web. The latter is a layer of the internet that search engines do not index and that you can only access with special software. The dark web is notorious for being a home to criminal activity.
Velasquez says you can do your own dark web scan, but she warns that it is time-consuming and dangerous.
“You would have to have a level of technical expertise to ensure that you don’t get yourself in trouble, get your computer infected and all of those sorts of things,” Velasquez says. “We really don’t encourage people to venture into those areas unless you have a high skill level.”
Grant says credit monitoring and identity protection services are most useful for those whose accounts already have been breached. “They can help you detect certain kinds of fraudulent use of your personal information more quickly than you might otherwise,” she says.
In addition, these services can be helpful for consumers facing more complex problems associated with the theft of their personal information. “People can end up with very difficult problems to resolve — like somebody’s actually used their identity when they’ve been charged with a crime,” Grant says.
DIY Identity Protection
Both Grant and Velasquez say most consumers do not require the extra protection associated with credit monitoring or identity theft protection services. “I don’t think they’re particularly worthwhile for consumers to buy,” Grant says.
Instead, consumers can tap into free resources that allow them to seize control of protecting their identities. For example, Grant encourages consumers to monitor their own credit reports. “There are many circumstances in which you can just look at your credit report yourself to spot any inaccuracies or fraudulent activity,” she says.
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Federal law guarantees you the right to an annual no-cost inspection of your credit report from each of the major credit reporting agencies. You can request your report at AnnualCreditReport.com, the official site of the three agencies.
You can monitor your credit reports more frequently by signing up for free services offered by companies like Credit Karma and Quizzle that allow you to access your reports (from one or two of the agencies) more than once a year.
If you discover a problem on your credit report or feel your information is at risk of being stolen, Velasquez says reaching out to your bank, credit card issuer or other financial institution is a relatively easy and free way to get additional protection.
For another layer of protection, “You can usually put extra passwords on your account,” Velasquez says. Many banks will give you an oral password that will prevent crooks from accessing your account, “even if they have all of the other credentials.”
Freezing Your Credit
The most powerful step to protecting your identity is also a do-it-yourself measure: freezing your credit.
“Whether you already have a problem or not, freezing your credit report is a good idea,” Grant says. She calls freezes the “one real prophylactic” measure that can help prevent identity thieves from successfully using your information for some of their most common crimes, such as fraudulent credit cards. One drawback to freezing your credit is that, in many states, it costs money to do. You also have to pay to unfreeze your credit later if you want to open a credit card account or apply for a loan.
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However, pending federal legislation would make it free for all consumers to freeze and unfreeze their accounts. And even if such a measure does not become law, many states are taking the matter into their own hands. “There’s a trend toward states enacting laws that provide free freezes for everybody,” Grant says. In May, Connecticut became the latest state to pass such legislation.
Another downside to freezing your credit is that you need to request the credit to be unfrozen whenever you need to access it. But Grant says this should not be a deal-breaker, as the process is simple.
“It’s really pretty quick and easy these days,” she says. “It might hang you up for a day, but it’s not an insurmountable barrier to getting credit.”
Choosing Your Credit Monitoring Service
If you decide to hire a service rather than go it alone, Grant and Velasquez say you need to shop around to make sure you find the credit monitoring or identity theft protection service that is right for you.
Some services offer basic credit monitoring. This can help detect many types of financial fraud, which Velasquez identifies as the most prevalent type of fraud linked to identity theft. “It’s certainly what we see the most in our call center,” she says.
However, Velasquez and Grant say that more robust monitoring is crucial to protecting you from other types of fraud related to identity theft. Grant says a lot of activity may not show up directly on a credit report, including when someone else applies for your tax refund or gets a job using your Social Security number.
Because of this, Grant encourages you to look for a service that provides a broad array of protections and help. “The broader the monitoring is, the more helpful it is in detecting the misuse of your stolen information in various ways.”
As part of doing your homework before signing up for a service, Grant and Velasquez urge you to ask some questions:
— How extensive is the monitoring? Do these services monitor reports from all three of the major credit reporting agencies? Do they monitor other smaller credit reporting agencies? Do they look at public records?
— What type of insurance does the service offer? Some companies promise to reimburse you for any financial damages related to identity theft. But be careful. You might not be covered for identity theft that occurred before you signed up for the service, and you might not receive full compensation for money stolen from you.
— Do they take an active role in helping you recover from a breach? If you pay for credit monitoring or identity theft protection, make sure the service offers help beyond what you can get for free elsewhere, like from government websites and nonprofits.
Even if the company promises such comprehensive assistance, drill down on details, Grant says. “They may contact creditors and others for you, but do they actually follow through and make sure that your problem is resolved?”
The Bottom Line
Most people can skip signing up with a credit monitoring agency, Grant says. “As scary as identity theft is and as upsetting as it is, most of the problems can be easily detected by consumers themselves or by their own creditors.”
Velasquez agrees, saying, “We don’t ever want people to feel like the only way they can protect themselves is to spend money.”
In fact, Velasquez and Grant emphasize that you likely can get these credit monitoring or identity theft protection services for free if, for example, there’s a data breach.
In addition, check with your credit card issuer, employer, home insurance company or membership organization like Costco or AARP. Many of these entities now provide such monitoring to people as a standard free or low-cost benefit. “You might have identity theft services without even realizing it,” Grant says.
Regardless of which route you choose — paid service or free DIY — remember that it is impossible to completely protect yourself from identity theft.
Nobody can guarantee you that you will not be a victim of identity theft,” Grant says. “We have seen some misleading advertising that makes it sound as if the service can [do so].”
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Is Credit Monitoring Worth It? originally appeared on usnews.com
