Beyond the Shredder - Identity Theft Protection Services
With over 8 million identity theft victims each year, simply being careful to shred credit card offers and keep your personal information in a safe place might not be enough. Thieves are growing more sophisticated. This makes diligently protecting yourself even more important.
Protection – the next level
You already know the basics: keep your personal information safe; protect yourself online; shred credit card offers, old receipts and statements. (Please see Avoiding Identity Theft for a comprehensive list of things you can do to prevent identity theft). Beyond the household shredder, how can we take identity protection to the next level?
Place fraud alerts or credit freezes on your credit reports.
A “fraud alert” is a signal placed in your credit report to warn potential creditors that they must use “reasonable policies and procedures” to verify your identity before they issue credit in your name. A “credit freeze” means that potential creditors will be barred access to your credit file.
Under the Fair Credit Reporting Act, you may be entitled to two kinds of fraud alerts: initial and extended. Both alerts are free of charge.
Initial fraud alert is what you request if you suspect, but are not yet sure that you have had your identity stolen, or are simply concerned about your everyday exposure to identity theft. It’s good for 90 days and can be renewed. To place an initial fraud alert, call one of the three national consumer reporting companies toll-free. The company you select is required to contact the other two, and they will place an alert on your credit report.
Equifax: 1-800-525-6285 or www.equifax.com
Experian: 1-888-EXPERIAN (397-3742) or www.experian.com
TransUnion: 1-800-680-7289 or www.transunion.com
An extended fraud alert can be requested ONLY if you have already been a victim of identity theft and have filed an Identity Theft Report with the police (you don’t ever really want to be eligible for this). The extended alert will stay on your credit report for 7 years. If your credit report has an extended fraud alert, potential creditors must contact you in person, or by phone or some other method you specifically provide before they can issue credit in your name. Furthermore, consumer reporting companies must remove your name from marketing lists for pre-screened offers of credit for 5 years.
Credit freezes go further. They allow you to completely restrict all outside access to your credit report, as opposed to permitting creditors access as long as they verify your identity, as in the case with fraud alerts. Formerly available to residents of only 10 states, as of November 1, 2007, credit freezes are now available to residents of all states. If you place a freeze on your report, potential creditors or others can’t get access to it unless you lift the freeze either temporarily or permanently. If you are a victim of identity theft and you have filed a police report, you can get a credit freeze free of charge. Otherwise, it costs approximately $10 per credit reporting company ($30 total if you freeze your report with all 3 companies).
If you anticipate opening a new account, submitting a mortgage application, or any situation where your credit report will need to be reviewed by a creditor, you can ask the credit reporting company to lift the freeze temporarily for a specific period of time and for a specific creditor. This will cost an additional $10 per reporting company and will require some lead time, so it is a good idea to check with the company well in advance.
To place a freeze on your credit reports, contact the credit reporting companies listed above or go to www.privacy.ca.gov/sheets/cis10security freeze.htm for detailed instructions, including sample letters to send to the companies requesting the freeze.
Remove your name from pre-approved credit card solicitation lists.
Similar to the National Do Not Call Registry that the FTC began enforcing in 2003, you can have your name removed from mailing lists or pre-screened offers for credit cards or insurance. These mailers are popular targets for identity thieves who steal mail or rummage through garbage cans for discarded offers. They use these offers to open up credit cards under your name and proceed to wreak havoc on your credit, unbeknownst to you until collection agencies come knocking. To remove your name from these lists, simply call 888-5-OPTOUT (888-567-8688) or go to www.optoutprescreen.com.
Review your credit report at least annually.
One of the best ways to protect yourself is to monitor your credit history via your credit report. You are entitled to one free credit report from each of the three credit reporting companies every year. You can order them every year at the same time or stagger them so you receive one report every four months during that year. To order your free credit reports, go to www.annualcreditreport.com.
Do it yourself or pay someone to do it for you?
So now that we know what we can do to protect ourselves, will we really do all of these things and, importantly, be mindful of renewing our efforts on a regular basis? Some will be very diligent, while others might be more sporadic, leaving windows of opportunity for thieves. If you fall into the second category, you might consider hiring an identity theft protection service.
LifeLock and TrustedID are two firms to consider. They have the highest consumer ratings on websites such as www.ConsumerCompare.org based on the services they provide, customer service, and price. They charge between $9 and $13 per month, or slightly reduced annual rates ($110 on average), for their services.
What do they do?
Both LifeLock and TrustedID provide identity theft prevention. Within moments of signing up for their services, they place fraud alerts on your credit file and automatically renew these alerts every 90 days. They also remove your name from the pre-screened mailing lists for credit card offers. Both companies will order your free credit reports from each of the three agencies on your behalf for you to review and monitor your credit. Finally, if a thief still manages to steal your identity, both companies guarantee up to $1 million in services and reimbursements to remedy the incident. Direct monetary losses from identity theft are typically much less than this guarantee, and, of course, you are not legally responsible for paying fraudulent debt incurred by a thief. It’s the time and effort it takes to restore your good credit that is the real cost of identity theft. This can sometimes require the services of professionals such as attorneys and credit counselors, both of which are covered by the guarantee.
Since it was founded 2 years ago, LifeLock has grown to be one of the largest providers of identity theft protection services to individuals and businesses. Based in Tempe, Arizona, LifeLock’s customer service is available 24/7, but the website offers no on-line account services. Therefore, you will need to contact them via telephone to make any changes to your account. LifeLock argues that this provides an important element of security by not enabling online access: thieves cannot hack into your online account. LifeLock’s CEO is so confident in his company’s service that he publishes his Social Security number across the Wall Street Journal and the internet. Not surprisingly, this taunt resulted in his identity being stolen, but LifeLock’s guarantee covered his costs.
Also founded in 2005, Silicon Valley’s TrustedID is considered to be the other big name in identity theft prevention. Although customers can log onto their accounts online, the ConsumerCompare.org rated TrustedID’s customer service significantly lower than LifeLock due to the limited service hours (Monday through Friday 7:30 AM to 4:30 PM PST) and time spent on hold. TrustedID’s signature product, called IDFreeze, has the same offering as LifeLock with a couple of additions. IDFreeze also includes credit card monitoring services to help detect if your credit card number has been stolen. You will receive an email or phone call if TrustedID finds signs of suspicious activity. Additional credit cards are easily added to your account online for this monitoring service. An optional service offered by TrustedID is CreditLock, their term for credit freeze. For an extra cost, $10 per freeze, temporary lift, or removal of the freeze for each credit reporting agency, TrustedID will take care of this for you.
Beyond these two subscription services, note that credit card companies and homeowner’s insurance policies often offer identity theft insurance coverage. Some homeowner’s policies automatically include this coverage while others may charge an additional annual fee ranging from $75 to $200. As with the guarantees of Likelock and TrustedID, the insurance coverage includes reimbursement for many of the same expenses but this often is limited to $25,000 or less. We can check your homeowner’s policy to see if this is covered.
Our clients can, of course, afford to self-insure against the potential actual expenses associated with recovering from identity theft. The $1 million guarantee offered by companies such as LifeLock and TrustedID is not itself sufficient reason to buy their services. The real reason to spend the modest $110 each year is to minimize the risk of the actual identity theft itself and have competent assistance in dealing with the aftermath if it still does occur. Currently, the consumer favorite appears to be LifeLock.
The sad statistics tell us that we need to protect ourselves from being victims of identity theft, whether we do it ourselves or hire someone to do it for us. Hiring a LifeLock or TrustedID may automate these preventative steps. However, if a thief does still manage to sneak through, please contact us immediately to add our assistance in resolving the situation.
Leigh Shimamoto, San Francisco
Note: Kochis Fitz/Quintile is of course not affiliated with any of the companies mentioned in this article and we can make no representation regarding the fitness of their services to clients’ individual needs.
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