What Identity Theft Services Can and Can't Do for You
The protections they offer may be more limited than you think
There are a variety of ads on TV warning about the dangers of the “dark web” and urging you to sign up for identity theft services. Several show shadowy figures at computers in darkened rooms, presumably harvesting your personal information for their criminal use.
Those ads are so effective that 36 percent of consumers who’ve seen them think that identity theft services can remove their info from the dark web—a part of the internet that can be accessed only with special software—according to a recent survey from the Consumer Federation of America. And 37 percent think that these services can prevent people who buy their personal information on the dark web from using it.
But identity theft services, which usually cost $10 to $30 a month, can do neither of those things.
Monitor Your Identity
Answer: Up to a point
It’s not possible to monitor all the different ways someone’s identity can be stolen, due to a lack of uniformity in software and electronic databases.
Companies can monitor your credit report and other forms of financial identity, but new-account fraud—when someone opens an account in your name—is only one kind of identity theft.
With medical identity theft, someone steals your personal information and uses it to obtain medical services. With criminal identity theft, people present themselves as you when they’re arrested or cited for a crime. Tax identity theft happens when someone fraudulently files for your tax refund. And there can even be identity theft regarding border crossings and immigration.
These crimes happen across different systems that often aren’t connected, and while some companies attempt to monitor them, it’s difficult to cover all of the ways you can be targeted.
One woman had major problems when her mortgage company reported her husband’s death to the credit bureaus under her Social Security number. As a result, the credit bureaus labeled her deceased. But she said her identity theft service never alerted her about it.
“She was weeks away from having all her financial assets frozen [when she came to me],” Kerskie says.
The woman made the discovery herself when American Express notified her that her card couldn’t be renewed because she was deceased.
“She said her identity theft company never sent her a notice,” says Kerskie.
Tell You Whether Your Information Is on the Dark Web
Your information is probably available.
“There have been thousands upon thousands of breaches all around the world, and there have to be somewhere between 200 million and 300 million Social Security numbers floating around as a result,” says Adam Levin, founder CyberScout, an identity protection firm. “You have to start with the premise that most of your personal identifiable information is out there.”
That said, knowing that your information is on the dark web isn’t all that helpful. “It shouldn’t change your behavior, it shouldn’t make you do anything any differently,” Siciliano says. “There’s nothing you can do about it. Consider your information in the hands of criminals. Done.”
Remove Your Information From the Dark Web
Although these companies can scan for your information and alert you to its presence, they can’t wipe it from the dark web.
Prevent the Theft of Your Identity
These companies can spot identity theft after it happens, experts say, but they can’t keep it from happening. If thieves have the right information, they’ll be able to file a medical claim or commit a crime in your name, and no one can stop them.
You can, however, take your steps to prevent credit identity theft by freezing your credit, which prevents anyone from applying for and opening new credit in your name. It’s now free of charge, and you can reverse it when you need to apply for new credit. Start with the three major credit bureaus—Equifax, Experian, and TransUnion. You can also freeze your credit with Innovis and the NCTUE, two bureaus that Kerskie says have become more robust in recent years.
Help You Restore Your Identity
Answer: It depends
If you find that your identity has been stolen, many of these services offer restoration services that will presumably make you whole again. But there are caveats, and satisfaction may depend on the type of identity theft. “Some of these companies may help you through the process, other companies send you a do-it-yourself repair kit, and other companies will say, ‘Oh, we don’t cover that in our contract,’ ” Kerskie says.
In addition, some will offer reimbursement for stolen funds up to a limit and depending on the level of protection you buy. But it's secondary to anything your financial institution offers, says Siciliano, and most people have their money in an FDIC-insured institution, so your bank will cover your losses.
How do you tell which services come with ID protection? Ask questions. Ask the company whether you’ll have to sign a limited power of attorney if you become a victim, something that’s required if the company is going to work with credit or financial companies on your behalf. Ask whether it work with you on medical identity theft or criminal identity theft. Ask what limitations there are on those services.
If you can find a firm that offers full-service restoration and does it well, it can be a valuable resource. Some companies also offer lost wallet protection with different plans, meaning that if you lose your wallet, they’ll cancel all your cards and arrange to get you new ones. These are helpful, especially when you’re in a pinch.
“You cannot fix, on your own, a lot of identity theft problems efficiently,” Siciliano says. “People are not researchers and good at handling records and making phone calls and sending emails.”