Identity theft is the fastest growing crime in America and every year there is over $10 billion lost to identity thieves. This has given birth to a niche market of companies and products offering protection.
By now I know that you have heard all of the horror stories about Americans whose identities have been stolen. Every day, people just like you and me, are working for hundreds of hours over many years to get their lives back in order, kids are being denied student loans because someone has already ruined their credit, people are losing their homes because thieves placed mortgages on their credit that they never knew existed, and even innocent individuals are ending up in jail for crimes that they never committed. All because of identity theft.
Identity theft protection services are said to be unnecessary by some consumers because the protection services are doing some things that you can do yourself. You are perfectly capable of setting up fraud alerts on your credit reports and renew them every 90 days. Yes, you are also fully able to contact the three (3) major credit bureaus every 90 days, if you remember to, and send a letter to each one, if you have the time.
As for myself? What do I do? Let me put it to you this way. I really don't have the time to mow my lawn, even though I am perfectly capable of doing so. I pay a lawn service $25 a week and they mow my lawn, trim my hedges and fertilize my grass for me.
During the winter, I am also physically capable of getting up earlier in the morning than usual, to go out and shovel snow. Does that mean I'm going to do that? Hell, no! I pay someone else to do that too.
My time is valuable and, for me personally, the cost of hiring someone else to handle these important, but pesky jobs is minimal and makes my life much less stressful. I don't know if you have ever dealt with any of the credit bureaus, but it can be a nightmare. They are a regular pain in the rear end. I would much rather pay someone else to deal with their bureaucratic red tape and save myself a major headache.
Keep in mind, however, that as far as protecting yourself from identity theft, you are the only one that can protect yourself at home. You need to be shredding all documents that have any of your personal information on them and not just crumpling them up and throwing them in the trash. That includes any credit card offers that you receive.
You don't have a shredder? Get one. You can usually pick them up any where for under $50 for a small one that will handle most personal home shredding tasks. Don't make it easier for the thieves. Identity thieves are known to go "dumpster diving", looking for this very information so that they can rip you off by stealing your identity.
It is also up to you to limit the amount of personal information that you give out to strangers. Do not ever give out your personal information over the phone, or in an email, to anyone that has contacted you asking for it.
If someone contacts you asking for personal information to update your account, get a name and phone number and tell them you will call them back. Then call the phone number that you have on file for the company. Call them and verify that the phone call is legitimate. If it is not, give the information that you have (name and phone number) of the caller to the company so that they can file a fraud report. Next, immediately call the police and file a fraud report yourself.
Before choosing which identity theft protection service you will hire, you will need to ask the company's representative some questions, during your initial interview.
Here is a list of questions:
- You will need to find out if the company is legitimate. Ironically, some offers of identity theft protection are actual attempts of identity theft.
- What are you getting for your money?
- How will you be notified if there is an abnormality on any of your accounts?
- Does the service monitor all three (3) credit bureaus? "If their answer to your question is 'We only monitor one credit bureau' that's not very helpful to you," says Frank W. Abagnale, author of "Stealing Your Life: The Ultimate Identity Theft Prevention Plan". (This book was on the New York Times best seller list as Mr.Abagnale, who is now a secure document consultant, was at one time the con man portrayed by Leonardo DiCaprio in the 2002 film "Catch Me If You Can." I highly recommend reading it. If you can't find it at the library, you can pick it up on Amazon.com.)
Identity theft protection can generally be divided into two classes:
- Those that offer victim prevention.
- Those that help you recover once you have already been victimized.
You want to get the first type of service so that you don't need the second. You do want to protect yourself from ever becoming a victim.
Identity theft protection services can set up fraud alerts for your credit files which tell lenders to contact you before providing credit in your name. They can also opt you out of receiving any credit card offers at home. You could do this yourself, but a service called LifeLock , will do it all for about $10 a month or $110 a year. That's less than I pay to have my lawn mowed or my driveway shoveled!
With LifeLock, if the lender can't contact you to verify that you are applying for the credit, then the transaction is stopped, says Todd Davis, chief executive of LifeLock. If your Identity is stolen while you are a client of LifeLock , they will do whatever it takes to recover your good name. If you need lawyers, they will hire the best they can find. If you need investigators, accountants, case managers, whatever, they’re yours. If you lose money as a result of the theft, they will give it back to you. This is the kind of protection and guarantee that I want in my life!
Sometimes your homeowners insurance will cover you if you have had your identity stolen and will reimburse you for the cost of restoring your identity. You will need to read and understand the terms of your policy to find out what the limitations of reimbursement covers. Many times homeowners insurance will only cover you up to $400 when it can cost you well into the $1,000's to rectify the fraud. Especially if it has gone undetected for a long period of time.
If your homeowners insurance does not cover you at all, inquire as to what the cost of a rider for identity theft protectionwould be.
Also ask your insurance representative these questions:
- Find out how much they will cover a week, in lost wages, and how many weeks of lost wages will be included in the coverage.
- How much out of pocket expenses they will cover.
- Ask if they will assign a representative to fill out all of the necessary forms, file affidavits and call credit bureaus should you become a victim.
- Find out what kind of support they will include in the coverage. You will want to know that if there is a problem, how will they will help you or if they are just going to throw you out to swim on your own.