Paying for identity theft protection is the best way to protect your finances from potential identity thieves. Constantly monitoring your accounts for suspicious activity will help you instantly detect and prevent any criminal from stealing your identity and committing various offenses in your name. This detailed guide will help you learn everything about ID theft protection services and how you can prevent and recover from ID theft.
What Is Identity Theft Protection?
ID theft protection is the process of monitoring credit activity, websites, and public databases for any sign of suspicious activity. ID protection companies do it with the help of various tech tools for a monthly or annual fee, which varies from provider to provider. If they detect any fraudulent transaction, they immediately alert the victim before taking certain ID protection steps. Those can include (a) freezing credit, (b) closing accounts, (c) filing police reports, and (d) repairing credit reports. They can also reimburse the victim for some costs, such as those related to reclaiming their identity.
Who Needs It?
Literally, anyone can benefit from the ID Protection Services. If you ever lose your Social Security card or it gets stolen, a thief could gain access to all of your accounts and open a new account in your name. Not only could they wreak havoc on your finances, but you could also go to jail for fraud if they file phony tax returns, for instance.
The same things could happen if there’s a data breach, and someone steals your Social Security number from an online database. They could also use your phone number, email address, driver’s license number, usernames, and passwords to steal your identity. If a criminal gets their hands on your personal or sensitive information, they could:
- Access and drain your bank accounts
- Apply for and max your credit cards
- Take out loans
- Open fraudulent accounts
- File fake tax returns
- Rack up your medical bills
- Create various other debts in your name
Types of ID Security Services
The most common ID theft protection services include:
- Credit Monitoring – keeping an eye on your credit report and score for any unusual changes
- Identity Monitoring – scanning websites and public databases to see if your personal information has been exposed in a potential data breach
- Proactive ID Prevention – locking your personal information so that only can approve of its use
- Active ID Protection – reporting a potential ID theft activity but not blocking the activity
- ID Theft Insurance – coverage for certain costs of reclaiming your financial identity
- Identity Recovery – minimizing damage and helping you reclaim your financial identity
What to Look for in an ID Security Provider?
To choose the right Identity theft protection provider, you need to determine what level of protection you need. Some offer basic plans with limited credit reporting and no fraud alerts, while others go way beyond credit reporting to monitor black-market sites and change-of-address databases too. Some providers even offer VPN protection and other security tools for safe browsing and protecting your usernames and passwords. Here are the key features to look for in an identity theft protection service.
Monitoring Credit Reports at All Three Major Credit Bureaus
The provider you choose should continuously monitor your credit reports and score at all three major credit bureaus: Experian, Equifax, and TransUnion. They should keep a watchful eye on any changes that are out of the ordinary. Those could include a credit limit increase, attempts to open new bank accounts, changes to your contact information, payday loan applications, and more. The major credit bureaus provide you with free annual credit reports, but you can’t check them any other time throughout the year. An ID theft protection company can, but make sure the one you choose actually sends you reports regularly.
RELATED: Cards that report credit explained
ID Monitoring and Protection
Due to the never-ending risk of data breaches, it’s vital to constantly scan public databases and websites for mentions of your personal information. If there’s any unauthorized use of it, you should immediately be aware of it and prevent terrible damage. A high-quality ID security company should provide you with robust identity monitoring and protection, helping you promptly stop potential criminals in their tracks.
Dark Web Surveillance
In the case of a public data breach, your personal and sensitive information stored in affected databases could quickly end up on the dark web. A tech-savvy provider offering dark web surveillance can monitor the black-market sites for any mention of your Social Security number, email addresses, name, usernames, passwords, credit card numbers, bank credentials, and any other sensitive data.
Your provider should immediately notify you when and if they detect any suspicious activity or unauthorized use of your personal information. They should do so via email, text message, phone call, or a mobile app if they have one. Few companies will alert you using all these methods, so be sure to check this in advance. Also, make sure your chosen provider sends you fraud alerts for literally everything they monitor.
Not every provider that offers ID theft insurance will reimburse you for all the stolen funds and costs involved in restoring your financial identity. Some will only cover notary and legal fees. So, make sure you read the fine print before making any commitments. Carefully read their terms and conditions to see what the insurance does and doesn’t cover. You should make sure it covers as much (if not all) of the costs related to recovering from ID theft.
ID Recovery Services
Having access to proper identity recovery services can be a huge help when trying to reclaim your financial identity after an ID theft. Look for a protection provider who can help you submit the right documentation to creditors, banks, debt collectors, and other companies affected by fraudulent transactions. Make sure they can help you repair your credit report and minimize any further damage.
Family Plan Options
If you want to protect your entire family against the consequences of potential identity theft, find a provider that offers family plan options. Paying individually for every family member is more expensive, and family plans usually come with a discount.
What is the best ID theft protection service?
Best available Identity protection services on the market.
- Identity Guard Protection Services – Best Overall Coverage
- LifeLock – Best Brand
- Identity IQ – Best Resolution Service
- IdentityForce – Best Service
- Transunion ID Theft Protection – Best Credit Bureau Integration
- IDShield – Best Family Plan
- Complete ID Theft Protection – Best Child Plans
What reports should I check for possible ID theft signs?
- LexisNexis Full File Disclosure – includes a public-records search, pre-employment background checks, auto & homeowner claims reports, searches for evictions and criminal records, and address history. Go to lexisnexis.com and fill the online form.
- Driving record – has your history of moving violations, your physical description, points, address, license status, & other details. Contact your state department of motor vehicles (DMV) to get a copy for a fee. (TIP: Beware of online middlemen selling the same information at higher costs. )
- Social Security statements – show your earnings history and should match your own earnings records. The government mails the statement annually, but if you’ve misplaced it or haven’t received one, you can order a copy online by going to ssa.gov and clicking on “Your Social Security Earnings Statement.”
- MIB consumer file – has coded listings of medical tests and conditions, driving records, and hazardous hobbies. Call 1-866-692-6901 or visit mib.com
- Prescription drug history – has information about the medications you’ve taken over the last five years, including doctors who prescribed them, your refill record, and dosages. Contact Intelliscript at 1-877-211-4816 or Medpoint 1-888-206-0335.
- Annual statement of medical benefit – is a record of your medical treatment and health insurance claims. Your health insurer can help you get this medical information.
- Rental history reports – have information on your rent references, payments, & evictions. Contact First Advantage SafeRent for a report at 1-800-815-8664.
How to Prevent ID Theft?
Since identity theft protection companies don’t prevent ID theft, you need to implement some preventative measures on your own. The following are the most critical steps you should take.
Protect Your Accounts with Strong Passwords
Hackers use advanced software to crack passwords, but really strong passwords can take more than a month to crack. So, don’t be an easy target. Come up with passwords that are impossible to guess – a combination of numbers, symbols, and upper- and lower-case letters. Don’t use personal or any other obvious information. Change them regularly and don’t use the same password twice. Add an extra layer of protection by enabling two-factor authentication on all your devices. Some ID theft protection providers offer this feature to protect your account additionally. Most importantly, don’t automatically save passwords in your browser, because it’s effortless for hackers to access them that way.
Beware of Phishing Emails
Phishing scams can cause you a lot of trouble, as their primary purpose is to steal personal and sensitive data via malicious links. Emails are the usual suspects for phishing links, but social media and other channels aren’t immune to the scams. When you click on a malicious link, a piece of malware installs on your device without you even knowing it. It starts recording keystrokes, thus uncovering your usernames, passwords, credit card details, and other information that’s ideal for ID theft. So, don’t click on any suspicious links. Triple-check the URLs even if they come from trusted sources because they too could easily fall prey to scams.
Regularly Monitor Your Credit Reports and Bank Accounts
You can keep an eye on credit card and bank accounts, as well as your credit reports to spot any unusual activity. You should check your bank accounts every week, and review your credit card statements at least once a month. You can also set credit card alerts that will notify you if there’s any unfamiliar change to your account. All three major credit bureaus can provide you with free credit reports, but only once a year. This is why ID security providers can come in pretty handy, as they constantly monitor your credit reports for suspicious activity. Many credit card issuers will also provide you with regular credit reports, some for free and others for a small fee.
Freeze Your Credit
Placing a security freeze on your credit is a great way to restrict access to your credit. A credit freeze makes it impossible for anyone to open new accounts in your name, even if they have your personal information and various credentials. This is because lenders wouldn’t be able to access your credit report. However, a potential thief could resort to other activities that don’t require a credit check, so this isn’t a surefire way to protect against identity theft.
Freezing your credit doesn’t mean you wouldn’t be able to use it. You can continue using your credit cards, as all your accounts will remain active. It also wouldn’t hurt your credit score. You typically wouldn’t be able to apply for credit during a credit freeze (unless a creditor doesn’t require a credit check). However, you can temporarily lift the freeze at any time. Freezing your credit is very simple, as all you need to do is contact all three major credit bureaus and ask them to put a security freeze on your credit. The service is free for everyone in the United States.
4 Steps to Take If You Discover ID Theft
If you have reason to believe that someone may have stolen your identity, or you’re absolutely sure they did, make sure you take all of the following steps.
1. Contact All Three Major Credit Bureaus
You need to immediately get in touch with all three major credit bureaus: Experian, Equifax, and TransUnion. Let them know that you suspect or are certain that someone has stolen your identity so that they know it’s not you making any fraudulent transactions. That way, if the thief does anything to damage your credit score, you will be able to repair it. Depending on the damage, it could take months or even years to rebuild your credit score.
As soon as you contact the credit reporting bureaus, make sure you request a credit freeze if there wasn’t already one in place. You can also set up a fraud alert, which works like a credit freeze but doesn’t prevent you from applying for new credit lines. You can set up either an initial fraud alert or an extended fraud alert. The former provides you with an extra copy of your free credit report and lasts for a year. The latter enables you to get two additional copies of your free credit report but stays in effect for seven years.
2. Alert the FTC
The next thing you want to do is notify the FTC (Federal Trade Commission) of the situation. The FTC doesn’t have criminal jurisdiction, but it will help you take the right course of action to protect your assets. It will provide you with an ID theft report and an effective recovery plan.
3. File a Police Report
Filing a report with your local police department is also a crucial step to take, especially if you know the thief’s identity. Not only will reporting the theft to the police help you prove your innocence, but it will also start the necessary investigation. What’s more, the major credit bureaus, your creditors, debt collectors, and other affected agencies will ask for the police report to help you recover from identity theft. So, be sure to ask for a copy. Also, provide the police with a copy of your FTC identity theft report, as well as any proof of the theft you may have. The proof could be your bank reports, credit card statements, and anything else that raised a red flag.
4. Notify the Companies Affected by Fraudulent Transactions
Last but not least, you should alert all the companies involved in fraudulent transactions. For instance, if you’ve received a medical bill for a service you didn’t actually get, notify the health provider immediately. The same goes for any other involved provider. Reporting the theft will help you dispute any and all purchases that took place.
Identity theft is a serious crime that affects millions of people every year. It’s a federal crime that can wreak havoc on your finances and credit score unless you immediately catch it and stop the thieves. There are some great precautions you can take to prevent ID theft, but not all of them are foolproof solutions. Freezing your credit is one of the smartest choices, but it does come with a few downsides and works if you haven’t been compromised yet.
That’s why you should leverage the vast services that plenty of ID theft protection companies offer. Although they can’t prevent someone from stealing your identity, they can instantly detect fraudulent activity and help you stop the criminals in their tracks. They can also help you minimize the damage and reduce the cost of recovery. Every provider is different, so make sure you thoroughly research and compare many of them before making your final decision. Whichever company you choose, be sure that you, too, stay on the lookout for any warning signs of ID theft. Perhaps you will notice a tiny discrepancy that no one else will give credit to, so you’ll be able to report it on time and prevent serious damage.