If you’re concerned about becoming the victim of identity theft or another form of financial fraud, you may be wondering whether you should invest in an identity monitoring service. By signing up for ID theft protection, you can receive alerts if a hacker makes a credit inquiry, sets up a new account or uses your personal information, such as your Social Security number, driver’s license or credit card.
Though these companies can help you monitor sensitive personal data, they may not prevent a bad actor from accessing and using your financial information. Plus, such services are often expensive, costing around $10 to $30 per month, depending on the type of protection you need. If you’re on the fence and you’re wondering whether the service is worth the payment, consider these benefits and drawbacks before you enroll in an identity monitoring service.
Pro: You’ll have peace of mind if you’re at a high risk of identity theft. Even if you conclude that there are better ways to monitor your accounts for identity theft, having an identity monitoring service may offer an extra layer of security and put your mind at ease.
For instance, Carol Gee, a freelance writer in Atlanta, says that she and her husband have had LifeLock for a couple years. “My decision to get it was due to a breach of medical records at the hospital where my husband worked and where we both had had several hospitalizations. Although we were provided with limited identify protection once it was over, we were left vulnerable. Also, prior to that, someone stole my wallet at my job,” Gee says.
So far, LifeLock hasn’t turned up any criminals trying to use Gee or her husband’s information, but she says she still benefits from the service. They spend about $200 a year on the least expensive plan option to monitor their credit.
Lifelock offers three plan options: The least expensive plan sends an alert if somebody else is using your Social Security number or credit card information and offers lost wallet protection, enabling you to cancel or replace a driver’s license or credit card, and offers reimbursement for up to $25,000 in stolen funds. The next tier plan offers extra services, such as alerting you when there’s a security breach with a major department store or hospital that may have your financial information. And the most expensive service offers added perks aside from alerting you to potentially compromised Social Security numbers or credit card information, including reimbursement for up to $1 million in stolen funds. “I view it like accident insurance. I hope I never have to use it, but happy to have it when I do,” Gee says.
Con: The cost may be prohibitive. Identity monitoring services can be expensive. LifeLock, for instance, has tiered pricing for $9.99 a month, $19.99 a month or $29.99 a month, depending on the plan you select.
Another identity theft protection service, Identity Guard, offers a plan for $8.99 a month for an individual, $19.99 a month for a couple and $24.99 a month for a family. For all of its plans, services include monitoring credit reports and credit card activity and alerting consumers of suspicious bank activity. Other reputable ID monitoring services include ID Watchdog Platinum, which costs $19.95 a month, and IdentityForce, which offers two main plans: UltraSecure for $17.95 per month and UltraSecure+Credit for $23.95 a month. As with all of these services, the more you pay, you more protection you’ll receive.
Con: The services don’t necessarily prevent fraudulent activity. While these services will alert you that fraud has occurred, they won’t necessarily keep it from happening, points out Greg Scott, a salesperson for a cybersecurity company in Fullerton, California. He also has been a victim of credit card fraud and wrote a cybersecurity novel called “Bullseye Breach: Anatomy of an Electronic Break-In.”
“The very best of those services can only report on activity that’s already happened. By the time the victim gets the warning, it’s already too late,” Scott says. “All those services are Band-Aids on a gaping chest wound.”
And according to Scott, a more pressing cybersecurity issue is compromised Social Security numbers. He hopes that reforms will be put in place to make it harder for determined thieves to gain access to sensitive Social Security information. “This system is a disaster in the making, and no identity monitoring service will fix it.”
Con: You can get similar protection without paying an ID monitoring company. There are a variety of free services offering identity monitoring, explains Robert Siciliano, a security analyst with Hotspot Shield, a virtual private network service, based in Boston. One service you may want to look into is the American Automobile Association, which offers its members free identity theft protection, Siciliano says. Another service to check out is TrueIdentity.com, a free identity protection service offered by the credit bureau TransUnion.
As you’ve likely noticed, especially if you’ve gone somewhere far-flung and your card has been suspended due to suspicious activity, your credit cards and banking institution also monitor your accounts. Corporations are trying to protect you from identity theft. What’s more, if you don’t mind putting in the extra effort, you can monitor your accounts on your own. And if your information is compromised, consult IdentityTheft.gov, which can help you get forms filled out and letters sent. For instance, the website can help you craft a letter to your credit card company in the event you need to get stolen funds recouped.
Still, there are some benefits of paying for an identity monitoring service. “All of these bells and whistles are definitely layers of protection or at least can assist the consumer in cases where things do go wrong and their identity is compromised,” Siciliano says. “Even when the monitoring service can’t actually proactively protect them, the restoration component kicks in.”
Alternatively, if you’re looking for a cheap way to protect yourself, consider freezing your credit. That way, it will make it much harder for criminals to open up new accounts in your name because lenders can’t pull up your credit report, which they generally need to do when agreeing to make a loan. Until recently, you would need to pay $10, $20 or $30 each time you opted to freeze your credit. Even better, freezing and unfreezing your credit does not affect your credit score.
Identity monitoring services may have trouble luring customers in the future, thanks to a new credit freeze law, says Scott Johnson, an insurance agent and broker in Mill Valley, California, who runs Wholevstermlifeinsurance.com, an insurance comparison website. Johnson says that many of his clients have credit freezes, a topic that comes up when he gets their Social Security numbers, which insurers require. As of mid-September, a new federal law went into effect, enabling consumers to freeze and unfreeze their credit file for free. You can also get a free freeze for your children if they’re under the age of 16.
Johnson has a credit freeze on his credit and wholeheartedly endorses it as a better alternative to identity monitoring services. “I always ask people: ‘Would you rather lock your door or get notified when a thief enters?'”
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