Concern over identity theft continues to rise, and with good cause. While the 2010 Consumer Sentinel Network report shows identity theft is at a “stable” level, it is once again at the top of the list of complaints. More and more, consumers are looking at identity protection services to help them manage their risks. And the most common question I get when speaking (or in the emails our readers send) is “Is there a good identity theft protection program?” My answer is always the same – it depends on what you want it to do for you. But identity theft experts like Frank Abagnale Jr. (of Catch Me If You Can fame) all agree – it isn’t really a question of whether or not your identity will be stolen, it’s just a matter of time.
The FTC has published a brochure [PDF] warning consumers that most identity theft programs will charge you a fee to do what you can do for free yourself. For some of us, it’s worth the cost to have some extra protection on our identities, but sometimes people will buy into a program without understanding exactly what it does (and doesn’t ) take care of, which leads to unpleasant conversations with customer service reps down the road. If you’re considering buying a service from someone, take a few minutes to understand how to evaluate an identity theft protection program.
You will probably be tempted to do your research online for information about an identity theft protection service before you enroll in one, and this is a great idea. However it’s important to keep in mind that 95% of the sites you will find are geared to promote a specific program because the person who put the site up makes a small profit from every sale that comes through his or her site. This means almost all of the sites you find in your research will give you biased information that will make the product they get paid on sound better. MSNBC did a piece about this, because more often than not, these sites make bold claims that the service cannot back.
Evaluating every program on the market is an impossible task. There are new programs creeping up every day, old programs are changing, and others are closing their doors. One of the bigger companies was forced to change how they marketed themselves because the promises they made were misleading, and people tend to believe everything when they are desperate for a solution to protect their identities. (Do not be surprised in the next few years when you start seeing companies that offered identity protection answering lawsuits for fraudulent business practices. As easy as it is to start a business and make empty promises, millions of dollars have already been lost to services run by scam artists looking to make a quick buck, and disappear before they have to make good on their agreements.)
- There are a couple of critical things to keep in mind, though, if you decide to enroll in a service to protect your identity:
- Credit Monitoring does not stop identity theft.
- Identity theft insurance will not pay you back money you have lost as a victim of identity theft.
- A million dollar guarantee is a marketing tactic, not a statement of coverage.
- A company that guarantees you will not be a victim of identity theft does not understand what identity theft is.
- Social Security identity theft and medical identity theft are the most dangerous types of identity theft, and very few companies do anything to address these areas.