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Do You Need Identity Theft Protection Services?

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Do You Need Identity Theft Protection Services?

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Identity theft protection companies pledge to act as guardians of your personal information, for a monthly or annual fee. Generally, they start with credit monitoring and layer on additional services so they can alert you to potential problems.

But alerts just flag you after the fact; they don’t prevent someone from stealing and misusing your financial data.

Consider paying for an identity theft protection service only if:

  • You’re already a victim of identity theft or at high risk of it; for instance, if your Social Security number has already been disclosed in a data breach or you’ve lost your Social Security card
  • You don’t want to freeze your credit reports
  • You know you won’t go through the effort of actively monitoring your own credit

You can do it yourself

You can perform the basic services offered by these companies yourself, often at no charge:

  • You can keep an eye on changes to your credit report and track your credit score for free through various personal finance websites or some credit card issuers
  • You can report identity theft and follow free recovery paths outlined by the federal government at IdentityTheft.gov
  • You can freeze your credit files at all three major credit bureaus – Equifax, Experian and TransUnion – for free, something an identity theft protection company can’t do for you

The first thing consumers need to do if they’re worried about identity theft is just to freeze their credit reports.

What identity theft protection companies do

In general, identity theft protection companies offer three main services: monitoring of your personal information, alerts of its use and resources for theft recovery. Many also offer tangential services, such as alerts about identity theft news and local sex offender registries.

Here’s an overview of the three primary services:

identity theft protection
Monitoring

Identity theft protection firms monitor your credit files and alert you about activity, such as new accounts opened in your name and credit inquiries received, so you can react quickly.

Alerts

Notify you of instances where your personal information has been used, like if someone tries to open a bank account in your name. This can be helpful because many people don’t realize identity theft has happened until their credit is wrecked, their bank accounts depleted, or they suddenly have a lot of new debt in their name.

Recovery

If someone hacks your information and uses it maliciously, these companies can help you recover lost money and help undo the damage to your credit. Most offer insurance policies of up to $1 million.

Compare identity theft protection services

You may decide you want a full suite of safeguards and don’t mind paying for peach of mind. Or you may know you won’t do it yourself.

If so, compare prices and coverage details to find a plan that fits. Make sure the product you choose monitors credit data at all three credit bureaus; otherwise, you would be paying for incomplete protection.

Avoid credit monitoring products from the credit bureaus, which tend to have less robust coverage and may limit your right to sue them, even if they’re the ones who exposed your financial data.

Here’s a look at three popular products in the identity protection industry. This is a small sampling; you may find a different provider that suits you better. If you’ve already placed credit freezes, you’ll need to temporarily lift them to allow a provider access to your files for monitoring.

identity theft protection
Lifelock Ultimate Plus

Pros:

  • LifeLock’s Ultimate Plus plan offers more than 15 services to help you watch for and recover from identity theft
  • The company tries to add value to its package through additional features such as a $1 million identity theft recovery plan and legal assistance

 

Cons:

  • In 2015, the Federal Trade Commission fined the company $100 million for failing to secure customers’ data and for deceptive advertising
  • LifeLock contracts with Equifax to provide some of its credit monitoring. The double whammy of recent data breaches at Equifax and LifeLock should give you pause
  • The top-tier plan is pricey, especially when covering a family: including a spouse costs an additional $29.99 a month, and children add $5.99 each

 

Cost:  $29.99 a month or $329.99 a year

Best for: those who don’t have an entire family to protect; those who can afford to spend a little extra for comprehensive coverage

IdentityForce UltraSecure+Credit

Pros:

  • IdentityForce offers less expensive three-bureau monitoring than big names like LifeLock
  • You can get a family plan, which covers two adults and any children 25 and under
  • Offers alerts about suspected health insurance fraud

 

Cons:

  • The sign-up process is tedious, requiring you to input information multiple times
  • The family plan is not readily apparent on the website and you may need to call to request it
  • Pinning down the lowest price can be tricky, since prices vary depending on whether you sign up online or over the phone

 

Cost:

  • $23.99 a month or $239.90 a year
  • Family plans are $35.90 a month or $359 if you purchase a year at once, which will give you two months free
  • Note that prices can be cheaper over the phone than online

 

Best for: those who want family-wide protection on a budget; those who want medical identity coverage

ID Watchdog Platinum

Pros:

  • ID Watchdog keeps credit monitoring, alerts and recovery simple
  • The plan has perks such as access to credit reports and scores, as well as a credit simulator
  • One standout feature: it’ll help you recover from pre-existing identity theft for an additional fee of $19.95 to $279.95, depending on the kind of fraud

 

Cons:

  • The company’s mobile app and desktop interface provide less information than those of its competitors
  • ID Watchdog offers fewer monitoring services than other companies
  • Some of the monitoring services can take up to 24 hours to complete scanning and populating your account

 

Cost:  $19.95 a month or $219 for an annual plan, which offers tri-bureau credit monitoring

Best for: those who want basic, no-frills credit monitoring; those who need help recovering from pre-existing identity theft