If you're concerned about the recent hack of Yahoo which compromised 500 million user accounts, here's a basic rundown of the situation and info on what to do moving forward. 1-It’s the largest hack ever of a single site – There...
What every informed consumer needs to know...
Over the last decade the rise in identity theft has become a growing concern. In 2013 alone, an estimated 13.1 million Americans reported having their identity stolen, or one theft every two seconds. With the increased number of data breaches, which broke records in 2014, millions of people’s information has become a target for cyber criminals. Companies that have been compromised are required to notify clients that their information may have been stolen. Estimates indicate one of three people who received these notices became victims of identity theft.
Identity theft could actually be a lot more serious and pervasive issue than it already is. Reports suggest that the “combined efforts of industry, consumers, and monitoring and protection systems" have in recent years succeeded in catching fraud more quickly. (Source: Javelin). These statistics may seem scary, but identity theft protection services exist to help you in the event you become a victim of this crime.
After reviewing a number of companies offering identity theft protection, we’ve found all the best companies offer four valuable services: credit monitoring, surveillance of the Internet and public databases for personal information, insurance, and recovery support from experts.
No one can prevent identify theft, but these companies will monitor your information and alert you if your personal information is threatened or compromised. This way, you and the company can work together to limit the damage. In a world where our personal information is constantly at risk, it’s important to take all precautions possible to ensure your information is kept safe.
Most identity theft protection companies started as credit monitors, and adapted as the needs of the consumer changed. The services offered by these companies have improved as well. Now credit monitoring is only one piece of the puzzle.
Companies and their representatives are likely to review your credit report more frequently than you will if you do it yourself, often daily, weekly or monthly. There are three credit bureaus (Equifax, Experian and TransUnion) that collect your credit history, and the information on the reports can vary from one bureau to the next, so make sure all three credit bureaus are monitored.
Under the Fair Trade and Accurate Credit Transaction Act, each credit reporting agency is obliged by law to provide you a free copy of your credit report every 12 months, when requested. However, if you want to monitor your credit more than once a year it can become costly. That is why we suggest choosing an identity protection service that will not only monitor your credit but will also send a copy of your credit report and scores to you regularly throughout the year.
Why is your credit important?
Your credit is essentially your financial reputation. Your credit report demonstrates to lenders how you have historically handled debt, and includes information about lines of credit that have been extended to you, your payment history, and the amount of debt you currently have with lenders as well as any accounts that have gone to collection agencies or legal action taken against you for non-payment.
Oftentimes, lenders (banks, credit card companies, loan providers, etc.), utility companies, leasing/rental companies, and employers will look at this report to learn more about you. If you have poor credit, this could prevent you from getting a line of credit extended, or possibly even prevent you from getting a job.
The Bottom Line:
Credit monitoring is not the only way Identity Theft Protection companies help detect threats to your private information, but it is an important part. Make sure to pick a company that monitors all three credit reporting bureaus. Some companies offer to send your credit reports and score to you in addition to monitoring.
Beware of websites that claim to give you free credit reports or scores. The only site that is authorized by Federal Law to give you these reports is www.annualcreditreport.com. Always be careful of who you give your personal information to!
Companies will proactively monitor the internet and other databases for your personal information. This can include, but is not limited to your: name, address, phone number, Social Security number, bank account numbers, and credit/debit card information. They achieve this by monitoring things like public records, criminal records, medical/insurance records, and black market internet sites to ensure the integrity of your personal information is sound.
Even if the company finds something fraudulent or criminal, they may not be able to do anything to remove it. However, chances are, neither could you. Instead, the identity theft protection provider can alert you faster than you would find out on your own, and work with you on damage control.
Additional services offered to protect you could include computer security software, such as anti-virus/anti-malware or keystroke encryption software. Some companies will also remove your name from junk and pre-approval mailing lists, which lenders use to mail pre-approved credit card and loan offers to consumers. By removing your name from this list, thieves cannot steal these letters from your mailbox or from the trash
Children in particular are at risk more and more because they have “clean” credit history linked to their Social Security number. It can take years for this type of theft to be noticed, giving thieves ample time to ruin a child’s financial reputation. Many companies recognize this threat and offer identity protection for children as an additional or stand-alone service.
Companies will monitor the internet and public databases, like:
And look for your personal information, like:
The Bottom Line:
The best Identity Theft Protection services also monitor the internet and public databases for your personal information. If they find that your information has been compromised, they will try to remove it, but this may not always be possible. In these cases they will notify you promptly and work with you to limit the extent of the damage. Remember, early detection is key when it comes to protecting your identity.
Identity theft protection companies also provide recovery assistance if your personal information is compromised. If your identity has been stolen, protection companies have identity theft specialists to help guide you through the recovery process. The company may also be able to act on your behalf when dealing with credit reporting bureaus, creditors, or other information sources. They may even be able to fill out paperwork and make phone calls for you.
This could mean that the company can put a fraud alert on your credit report on your behalf, or assist you in freezing your credit. A fraud alert is essentially a flag on your credit file that notifies potential lenders that extra steps should be taken to verify the identity of the person trying to take out a line of credit. A credit freeze (or security freeze) is the next step up from a fraud alert. This hides your credit report completely from lenders looking to extend credit. However, you will have to remove the freeze if you want to apply for a loan or open a new credit card. Typically there is a small fee associated with credit freezes that varies by state (usually $10-15).
One form of recovery assistance is called lost wallet protection. If you lose or misplace your wallet or purse, most companies will help you report and replace items such as credit/debit cards, licenses, insurance cards, checkbooks, and much more. They can also help you access funds from your bank account to help hold you over until your new cards arrive.
For some of these restoration or recovery services you may be required to sign a limited power of attorney in order for the company or their representatives to legally act on your behalf. Since this will give the company legal power to represent you, make sure to read any legal document carefully and consult a lawyer if you have any questions or concerns before you sign.
Companies provide Recovery Services to customers whose identities have been stolen, including:
The Bottom Line:
The third service that makes Identity Theft Protection worth it are the Recovery Services provided. From setting up a customer with a specialist to help throughout the recovery process, to contacting banks and lenders on your behalf, this service gives victims of identity theft additional support during a difficult time. However, in order for a company to act on your behalf, you may be required to sign a limited power of attorney, so make sure you take the time to read over any legal documents carefully and consult a lawyer if you have any questions about what you are signing.
The average identity theft victim spends 9 hours on recovering their identity. However, 29% of victims report spending a month or more repairing their name after a theft.
Identity theft insurance will not cover any monetary losses directly related to your identity being stolen (charges made using your information by the thief in question), but instead will help cover the costs associated to recovering or reclaiming your identify, including: legal fees, lost wages, travel expenses, and possibly even child/elder/spousal care.
In order to be protected by insurance, many companies require you to notify them of any potential identity theft claims within a certain number of days of suspected activity (typically 90 days, though some require you to report it sooner.). Most services offer up to $1 million in identity theft insurance. However, they may have benefit limits that cap the amount you’ll be covered for per incident or per policy period. For example, you may only be able to receive a maximum of $2,000 per week in lost wages, for up to five weeks (per policy period). The $1 million is the cap for the total amount paid out for each of the conditions covered.
We suggest looking for an insurance plan with no deductibles. If you select a company with a deductible, you might find yourself responsible for the first $100-500 to be spent out-of-pocket before your insurance coverage kicks in. Read the insurance policy carefully, as the fine print might limit the amount of work the insurance company will do to restore your identity and your credit. All of the Top 10 Identity Theft Protection Companies have a $0 deductible.
Instead of Insurance, many companies offer a Service Guarantee. This guarantee often outlines the services and support you are entitled to if you become a victim of identify theft, much the same way insurance does. Just like insurance, you will want to read over this guarantee before signing up.
$1 Million Service Guarantee
You may see a lot of companies talking about a $1 Million Service Guarantee or Insurance Policy. The most important thing to know about this is that it will NOT cover monetary losses resulting from your identity being stolen. Meaning that the money the thief stole in your name is not covered.
However, Insurance will help you cover expenses related to recovering your Identity, such as legal fees, lost wages, travel expenses and care services for dependents.
The Bottom Line:
Whether you select a Service Guarantee of an Insurance policy, both cover much of the same things. Just make sure you read the policy or guarantee carefully so you understand what you are covered for.
It’s important to remember that no one can prevent identity theft. Companies may not always be able to prevent your information from being stolen, which is why they offer service guarantees and insurance to help and protect you if you become a victim.
In addition to the services offered by identity theft protection companies, we also review companies based on their customer service.
Most identity theft protection companies have limited hours of operation. While some companies do operate 24/7, this is an added perk though not a requirement. Many companies keep normal business hours because over the years they have found that, even if a fraud is noticed past business hours, there is little that can be done until the next business day to resolve it. Oftentimes, if you are the confirmed victim of identity theft, companies have specialists that will work with you outside of normal hours of operation to reclaim your identity.
Security standards for the company are also important. These companies help us keep our personal information private, and therefore should place a great deal of importance on the security of their website. Websites should be secured with encryption (HTTPS). Company servers should also be secured, not only from external hackers but anyone internally who is able to access the servers.
Company employees receive training on how to handle private information securely and workplaces have strict policies that make it difficult for internal theft of information, such as video surveillance of employees or advanced internal software which prevent employees from being able to access your personal information files. The internal security policies and practices are often difficult to determine, so we suggest asking about this before signing up with a company. Additionally, look for a company with a history in the industry and a reputation for great customer service.
We also like identity theft protection companies who have online resource centers for their customers (some are even open to the public). Here, you can find articles that help you expand your knowledge of identity theft, find forms that you may need if you become a victim, and guides and links that can help you answer your questions. However, with the number of resources available online for identity theft victims, this should not be a requirement.
Most identity Theft Protection Companies are transparent about their policies, services & limitations.
Because of the sensitive nature of the information they protect, the best companies want to make sure their customers feel safe and are happy to answer questions (as long as it’s not about proprietary information).
The Bottom Line:
Most Identity Theft Protection Companies keep regular business hours during the week, while some offer around the clock support. Just because the company is available 24/7 does not mean you will be getting the best services, so don’t let this be the main factor in selecting a company. Additionally, pay special attention to security measures taken by the company. Each company may have different practices and security measures in place, so don’t be shy about asking.
Make sure you take the time to read over the service agreement, privacy policies, or any other legal documents, agreements or guarantees before you sign up. We cannot stress this enough! Because of the private nature of information these companies will have access to, you want to ensure that you understand what the company can and cannot do with your information, as well as the services they can and cannot provide to you.
Find a service without a long-term contract if possible. Most identify theft protection companies do not have long-term contracts, and paying month-to-month is the most popular options for most consumers. However, many companies offer quarterly or annual subscriptions as well, and may even discount your monthly rate if you pay upfront for longer periods of time.
Cancelation should be easy. Most companies allow you to cancel your service at any time and many will reimburse you for the time do did not use, while others will keep whatever you’ve paid upfront. Again, make sure to read your service agreement carefully to determine cancelation terms.
The majority of companies offer a trial period for their services, usually lasting 14-30 days. Some companies offer one-time services like providing your credit report or scores, and do not offer refunds for products provided to you (unless you don’t receive said product, in which case the company will typically refund you).
The Bottom Line:
Read all documentation carefully (agreements, guarantees and especially any legal documents) to understand what a company can and cannot do with the information you provided. Additionally, avoid long-term contracts. Most customers opt for a month-to-month subscription. Cancellation is easy, just call to cancel whenever. Make sure you understand the cancellation policy as some companies do not reimburse for time unused. Also, some companies offer trial periods, typically 14 days or more.
We do our best to keep our information up to date, however we always suggest you double check with the companies before making any commitments to make sure you are getting the services you need and you understand the policies in place.
One of the biggest debates when it comes to Identity Theft Protection is whether or not it is worth purchasing. Opponents will argue that it is a waste of money because a lot of what companies do, you can do for yourself. While you can monitor your credit and bank accounts yourself and identity theft victims have plentiful access to recovery resources, many people find that in the long run it takes too much of their time and they end up not continuing the good habits they intended to practice. If you do not monitor your credit and accounts regularly and take precautionary steps, you are not protecting yourself. As a result, many people decide to outsource this responsibility to a company that will do it for them.
Companies offer different levels of service, with basic plans starting around $10-15 per month typically. Premium packages usually fall in the $25-30 range. These are the packages that offer the four services we suggest when looking for an identity theft protection company.
If you pay for longer periods of time upfront (typically a year), you will likely see a significant discount to your service. However watch out because cancelation policies may differ and a few companies may not reimburse for time paid upfront, so make sure you know what you’re options are before signing up.
Some companies also offer packages that will protect your entire family. These packages are discounted compared to an individual subscription, so this may be the best option for consumers looking to cover multiple family members. If you're looking to protect your child, the cost may be discount if purchasing coverage for an adult in tandem.
The Bottom Line:
For $1 a day, it’s not surprising that so many people are interested in outsourcing identity theft monitoring to a company that specializes in this. Monitoring yourself can be time consuming and costly, and many people loose interest over time. If you pay upfront for longer periods of time, you will likely get a discount, but make sure you understand the cancelation policy, so you are not caught unaware. Some companies also offer packages for families.
To make sure you get the best possible deal, we suggest checking rates on the company’s website as well as calling them directly. Sometimes offers on the phone are different than the offers online.
Reading reviews from customers of Identity Theft companies is a great way to learn more about the company and the customer experience. Here are a few thoughts to keep in mind when reading reviews.
For the best identity theft protection, visit the Top 10 companies here!