Is Identity Theft Protection Worth It?
As of 2010, 25 percent of Americans use some sort of identity theft protection service, according to Money Talks News. Identity theft protection typically costs about $200 (as of February 2011), but, even though these services often offer better protection than you could on your own, no service cannot offer absolute protection.
Other People Are Reading
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Expert Insight
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Linda Foley, founder of the Identity Theft Resource Center, told CNN in 2010 that identity theft protection services were not worth it if they cost more than $50 per year in premiums and had a deductible larger than $250. Most subscription plans do not cover money lost due to an identity thief, but expenses incurred trying to clear your name, such as postage for certified mailings and long-distance phone call surcharges.
Considerations
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Credit rating agencies offer identity theft protection that may go beyond what the average consumer can achieve on his own. Experian, for example, trawls suspected underground Internet crime rings that sell private consumer information. Instead of having to check your credit report frequently, fraud protection alerts you to suspicious activity, such as when a new account appears on your profile.
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Decrease in Massive Data Theft
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The percent of Americans using identity theft protection decreased by 17 percent over the period of 2008 to 2010, according to Forbes. Part of this decrease comes from the lack of incidents involving massive data theft, such as the theft of private data of 100 million customers from Heartland Payment Systems. Do not ignore the threat of identity theft, however. As of February 2011, the average victim loses $2,556 and even more when identity theft damages a credit score and increases the interest rate on his loans.
Tip
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If you go with an identity theft protection service, avoid companies that offer to prevent any chance of theft --- nobody can offer this, according to Consumer Affairs. Also, make sure it has a clear policy on what expenses it covers. Consumers that want to save money can do most of the legwork of these services for free. If you throw out mail with sensitive information on it, shred it and make the numbers unreadable. You can also ask the credit agencies to put a fraud alert on your report every 90 days.
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References
- Money Talks News: 10 Top Tips For Free Identity Theft Prevention
- CNN: The Price of Identity Theft Protection
- Forbes: Consumers Are Ditching The $2.4 Billion ID Theft Protection Market; Andy Greenberg; 2010
- Consumer Affairs: Identity Theft "Protection" Services Not Always Worth the Cost
- Moolamony: Are Credit Monitoring And Identity Theft Protection Worth The Cost?
- Photo Credit what do you think image by Frenk_Danielle Kaufmann from Fotolia.com
