ID-theft protection services typically not worth the money
|
The most visible response by big business to the epidemic of ID theft has been to roll out insurance and credit products that
exploit fear of the crime. Insurers offer ID-theft insurance, which is of dubious value. Credit-reporting agencies and credit-card
issuers offer credit-monitoring services, which can be of some help but mostly after you’ve become a victim.
Identity-theft insurance. Farmers Group, American International Group (AIG), Travelers, Chubb, Encompass, and some credit-card issuers offer these
policies. They usually cost $25 to $50 per year, and have a maximum benefit of $15,000 to $25,000 and deductibles of $100
to $250.
Policies generally cover the expenses of cleaning up the crime, including attorney’s fees, costs of mailing correspondence,
and lost wages. They seldom cover the out-of-pocket loss to the victim, typically about $800. Given the limited coverage,
we don’t recommend buying ID-theft insurance.
Credit-report monitoring. This service is pitched by the big credit bureaus--Equifax, TransUnion, and Experian--and by credit-card issuers like Trilegiant.
For $30 to $150 per year, these companies promise to monitor your credit report and alert you when they receive credit applications
or inquiries.
Many experts say, however, that obtaining an annual credit report from each of the three major bureaus, about $9 apiece, is
a sufficient preventive measure for most consumers.
Residents of Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont are entitled to a free annual credit
report. No matter where you live, you can get a free report if you are a victim of ID theft, unemployed, or have been turned
down for credit or a job because of a negative report. California residents who are ID-theft victims are entitled to a free
monthly report for one year.
One instance in which you might consider buying a monitoring service is if you’re already a victim of ID theft and want an
early warning of new incidents. Consider, however, that even credit-
monitoring services may sell data that you provide to them to affiliates, whose databases may not be secure.
ID-theft prevention services have spawned a new scam. Telemarketers and e-mail spammers offering free credit reports ask you
to fill out a form with your personal information, which they use to commit fraud against you.
Never accept an offer for free credit reports or credit monitoring. Contact the credit bureaus or your credit-card issuer
directly if you want such a service.
|
|
|
