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Identity Theft Prevention Services

by Carol Thomas
  • Overview

    Identity Theft Prevention Services
    Identity Theft Prevention Services
    The rapid rise in the number of cases of identity theft has been matched by a corresponding increase in businesses offering to protect you from the consequences of this crime. Arguments remain, however, as to the effectiveness of the services these companies offer.
  • Services Included

    In "Identity Theft Protection 101," Max Thompson identifies five services typically offered by identity theft protection companies. These include daily monitoring of your credit reports; maintaining fraud alerts on your reports; providing you with lists of all credit applications issued under your name; eliminating your pre-approved credit offers; and monitoring other personal identifiers such as your social security number.
 
  • LifeLock Example

    LifeLock, an identity protection company headed by Todd Davis, provides an example of the problems such businesses face in guaranteeing you protection from identity theft. Davis, who is known for displaying his own social security number in advertisements as testimony to his company's effectiveness, had his own identity stolen in May 2008, according to the "New York Daily News." The subsequent loss of public confidence in LifeLock's program caused customers in West Virginia, Maryland and New Jersey to file suit against the company.
  • Consumer Federation of America's Report

    A March 2009 report by the Consumer Federation of America (CFA) entitled "To Catch a Thief: Are Identity Theft Services Worth the Cost?" voices its concern over the effectiveness of these services. After studying 16 businesses that provided identity theft protection, the CFA found numerous problems. These included a lack of clear information on coverage and costs; incomplete data on insurance coverage; vague guarantees; misleading statements as to the effectiveness of fraud alerts; and the use of internal arbitration methods that could limit your rights as a consumer.
  • Identity Theft Prevention a Misnomer

    The CFA report also criticized companies that advertise identity theft "prevention" services. According to the report's author, Susan Grant, although some services these companies offer may provide protection from the effects of this crime, preventing identity theft is not possible.
  • Federal Trade Commission's Recommendations

    The Federal Trade Commission (FTC ) recommends that you use the free identity protection services you are entitled to before purchasing services from a vendor in "To Buy or Not to Buy: Identity Theft Spawns New Products and Services to Help Minimize Risk." The FTC points out that the Fair Credit Reporting Act permits you to place both a 90-day initial fraud alert and seven-year extended alert on your credit reports, at no charge. These alerts require that creditors contact you personally before issuing credit in your name. You can also issue a credit freeze, which stops anyone from accessing your credit reports. The FTC further recommends that you stagger your requests for your free credit reports so that you receive one every four months from a different reporting agency and thus obtain a more frequent review of your credit status. The FTC's advice to consumers who are considering subscribing to a paid identity protection service is quite succinct: "Read the fine print."

    References & Resources