Identity theft protection services are a waste of money


If you are one of the 48 million Americans who purchased some sort of “identity theft protection” service in 2011, you wasted your money.

Identity theft protection services and credit reporting agencies such as Equifax, Experian and Trans Union push statistics like “almost 14 million adults were victims of identity theft in 2011” and “over 100 million Americans have had their personal identifying information placed at risk of identity theft as a result of governmental and corporate data breaches.”

While true, these statements are nothing but scare tactics so you will purchase a service to protect your good name and reputation within the community.

Some of these “identity theft protection services” cost up to $189 annually.

What the credit reporting agencies fail to tell you is that identity theft protection does not cover prior instances of identity theft, IRS tax return filings, account takeovers, the misuse of credit or debit cards, or the establishment of personal identification (such as a driver’s license or Social Security card) in your name.

Americans are spending an estimated $3.5 billion a year on identity theft protection. Recent reports indicate that by 2015, Americans will be spending in excess of $6 billion to protect their identity from theft.

Most of these services are a waste of money as almost all of the services provided are available at little or no cost to the consumer.

There is no reason to pay a monthly or yearly fee for something you can do yourself for free.

Periodically review your credit report

By keeping close tabs on your consumer credit profile, you can detect signs of identity theft early. If you find an account not opened by you and have positively identified it as fraudulent, enter a dispute directly with the creditor as well as with the credit reporting agencies of EquifaxExperian and TransUnion. You can obtain a free credit report at www.annualcreditreport.com or 877-322-8228. When you pay for identity theft protection, this free credit report is one of the “benefits” they tout.

Place a 90-day initial fraud alert on your credit report

Contact the credit reporting agencies and request a 90-day initial fraud alert on your credit report. Not only will this trigger a free credit report but will advise potential creditors to investigate any application prior to issuing credit, goods, benefits, services and/or employment. Contact Equifax at 800-525-6285, Experian at 888-397-3742 and Trans Union at 800-916-8800. When you pay for identity theft protection, this fraud alert is one of the “benefits” they tout. Just be sure to renew the alert every three months.

Freeze your credit report

Identity thieves are frozen in their tracks without access to your credit report as potential creditors will not have access to your credit history. In most states, you are entitled to temporarily “freeze” access to your credit profile without cost if you are over 65 years of age or are a verified victim of identity theft. All others may be required to pay a small fee. Without access to your credit report, a responsible lender will not issue credit. When you pay for identity theft protection, a credit report freeze is one of the “benefits” they tout.

Stop unsolicited credit card offers

Are you tired of junk mail filling your mail box? Opting out at www.optoutprescreen.com or 888-5OPT-OUT will stop most unsolicited pre-approved applications and reduce the incidence of identity theft. Opting out refers to the process of removing your name and address from lists supplied by the Equifax, Experian, Trans Union and Innovis credit reporting agencies to be used for firm (preapproved/ prescreened) offers of credit or insurance. When paying for identity theft protection, opting out is one of the “benefits” they tout.

Purchase a cross-cut shredder

“Dumpster diving” is still a very popular method of obtaining credit card applications and supporting documentation. Purchase a cross-cut shredder that cuts vertically and horizontally, turning sensitive mail into confetti. If you think a torn up credit card application will be rejected by a credit card company, you have not heard the story of how Chase Bank approved a ripped up application.

Victims of identity theft often feel pressured into purchasing additional identity theft monitoring products when contacting the Equifax, Experian and Trans Union consumer reporting agencies to repair their credit. So much so that the Federal Trade Commission has recently reported the conduct in a 73-page report titled: “An FTC Staff Report on a Survey of Identity Theft Victims.”

What the credit reporting agencies fail to tell you is that identity theft protection does not cover prior instances of identity theft. As such, you are not protected and are wasting your money.

The FTC report also found that the vast majority of Americans dealing with identity theft issues were unaware of their rights under the Fair Credit Reporting Act. These rights included the ability to request free credit reports when placing a fraud alert, the ability to block fraudulent information from appearing on their credit reports and to receive a notice of these and other important rights directly from creditors and consumer reporting agencies.

While the Credit Card Act of 2009 mandated a number of changes in relation to “free credit reports,” the area of identity theft protection is an area to watch. Reduced fees in one area will only mean enhanced fees in another. There is no reason to pay a monthly or yearly fee for something you can do yourself for free.

Bill Lewis is the principal of William E. Lewis Jr. & Associates and host of “The Credit Report with Bill Lewis” — a daily forum for business and financial news, politics, economic trends and issues on AM 740 WSBR in south Florida.

Identity Theft Protection is a Waste of Money


Are you one of the 13 million people who purchased “identity theft protection” in 2009?  If so, you wasted your money.  Identity theft protection companies push statistics like “almost 11 million adults were victims of identity theft in 2009” while prodding you to purchase a service that could cost up to $179.00 per year.  What they fail to advise is that identity theft protection does not cover account take-overs, the misuse of debits cards, or the establishment of personal identification (such as a driver license) in your name.

I am happy to report that almost all of the services provided by identity theft protection companies are available at little or no cost.  There is no reason to pay a monthly or yearly fee for something you can do yourself.

REVIEW YOUR CREDIT REPORT

By keeping close tabs on your credit report, you can identify signs of fraud early.  If you find an account not opened by you and have positively identified it as fraudulent, enter a dispute with the credit reporting agencies of Equifax, Experian and Trans Union.  You can obtain a free credit report at www.annualcreditreport.com or (877) 322-8228.  When you pay for identity theft protection, this free credit report is one of the “benefits” they tout.

PLACE A 90-DAY INITIAL FRAUD ALERT ON YOUR CREDIT REPORT

Call the credit reporting agencies and request a 90-day initial fraud alert on your credit report.  Not only will this trigger a free credit report but will advise potential creditors to investigate any application prior to issuing credit, goods, benefits, services, and/or employment.  Contact Equifax at (800) 525-6285, Experian at (888) 397-3742 and Trans Union at (800) 916-8800.  When you pay for identity theft protection, this fraud alert is one of the “benefits” they tout.

FREEZE YOUR CREDIT REPORT

Identity thieves and creditors are frozen in their tracks without access to your credit report as they will not have access to your credit history.  In Florida, you are entitled to temporarily “freeze” access to your credit profile without cost if you are over 65 years of age or are a verified victim of identity theft.  All others must pay $10.00.  Without access to your credit report, a responsible lender will not issue credit.  When you pay for identity theft protection, a credit report freeze is one of the “benefits” they tout.

STOP UNSOLICITED CREDIT CARD OFFERS

Are you tired of junk mail filling your mail box?  Opting out at www.optoutprescreen.com or (888) 5OPT-OUT will stop most unsolicited pre-approved applications and reduce the incidence of identity theft. Opting-Out refers to the process of removing your name from lists supplied by Equifax, Experian, TransUnion, and Innovis to be used for firm (preapproved / prescreened) offers of credit or insurance.  When paying for identity theft protection, opting out is one of the “benefits” they tout.

BUY A CROSS-CUT SHREDDER


“Dumpster diving” is still a very popular method of obtaining credit card applications and supporting documentation.  Purchase a cross-cut shredder that cuts vertically and horizontally, turning sensitive mail into confetti.  If you think a torn up credit card application will be rejected by a credit card company, you have not heard the story of how Chase approved a ripped up application.

While the Credit Card Act of 2009 has mandated a number of changes in relation to “free credit reports,” the area of identity theft protection is an area to watch.  Reduced fees in one area will only mean enhanced fees in another.  There is no reason to pay a monthly or yearly fee for something you can do yourself.

William E. Lewis Jr., is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

http://www2.highlandstoday.com/content/2010/mar/07/lc-identity-theft-protection-is-a-waste-of-money/columns-welewisjr/