Are Credit Monitoring Services Worth the Price?
Identity theft is a serious issue that impacts millions of people each year. Identity theft is a crime where criminals use a person’s name, Social Security number, birthdate and other personal information for financial gain. A thief may take money from a victim in many different ways. For example, a thief may directly take money from a victim’s bank account, fraudulently use a victim’s credit card or even obtain a loan under the victim’s name. Victims of identity theft have even been arrested by police due to the actions of the thief when using the victim’s name. The average victim of identity theft suffers financial losses of about $6,000 and spends many stressful hours trying to resolve the issues.
In the past, identity thieves would obtain use of another person’s identity by stealing mail, sorting through trash or by using other similar means. However, as more people became aware of these tactics, people began shredding bank statements and other documents containing personal information to prevent this type of theft. Though these traditional types of theft still happen, thieves are now more likely to steal information through electronic means. Modern thieves, who are technologically savvy, can hack into the computer systems of banks, retailers and even government offices to remotely steal information with little chance of being caught. Thieves can also intercept information via the use of skimmers at gas pumps, ATM machines or other locations where people use credit and debit cards.
The bad news is that there is little that consumers can do for themselves to reduce the likelihood of being a victim of identity theft through computer hacking. A consumer can closely monitor his or her bank accounts and credit reports, but this will only provide them with information on things that have already happened. The delay in noticing the problem could result in dire financial consequences for the consumer. However, consumers are not powerless against modern identity thieves. There are a number of companies that offer identity theft protection services to consumers. These companies provide a range of services designed to protect consumers from becoming identity theft victims.
Though there are some differences from one company to another, most identity theft companies provide similar basic services to their customers. Companies will provide an alert to their customers when someone pulls data from the customer’s credit report. For example, if a thief tries to apply for a credit card in the customer’s name, the credit monitoring service would alert their customer when the credit card company made a request to one of the credit bureaus. Companies providing protection services also typically provide an agent to assist customers with an identity theft issue and provide some level of insurance protection against financial loss. Most also provide assistance notifying banks or other financial institutions when a customer’s wallet is lost or stolen.
Beyond the basics, the major credit monitoring services provide a number of different services. For example, LifeLock’s premium service provides their customers with three credit reports and credit scores each year, monthly credit score reports and alerts for changes to checking, savings and retirement accounts. Identity Guard provides their customers with public record monitoring and spyware protection to reduce the chances of identity thieves stealing information from their customer’s personal computer. LifeLock and Identity Guard’s basic plans start out at about $10 per month. LifeLock’s premium service is about $25 per month and Identity Guard’s is about $30 per month.
Credit monitoring services are also available from the three major credit reporting bureaus: Experian, TransUnion and Equifax. The monitoring services provided by the credit bureaus are not as extensive as those from the other companies that specialize in credit monitoring. However, the credit bureau’s do provide access to credit reports and provide consumers with activity alerts for about half of the cost of the other credit monitoring services.
While the protection and alert features of credit monitoring services can protect consumers from becoming victims, perhaps the most important feature of the full service plans is the assistance they provide in the event that a problem occurs. Having a real person to help notify banks, correct information with the credit bureaus and even provide information to the police, is a service that can save a person a lot of time and stress. As most people lead busy lives and do not have the time to monitor their accounts on a daily basis or deal with the expense and hassle of becoming an identity theft victim, the small cost of paying for a credit monitoring service can buy a lot of peace of mind.