Target 2: What You Need to Know About Identity Theft Protection - WBAY

Target 2: What You Need to Know About Identity Theft Protection

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In the wake of major security breaches at retailers across the nation, you might think about taking extra steps to protect your financial information.

According to the National Identity Theft Resource Center, there have been more than 300 data breaches already this year, putting more than 10 million people at risk.

The Better Business Bureau says more people are shopping for identity theft protection.

"Sooner or later, we're going to be shopping at places that will have data theft, data breaches. It's kind of a new reality, and that probably explains the growth of these new services," said Susan Bach, Better Business Bureau Regional Director.

There are questions to ask.

Is it insurance or is it credit monitoring?

Begin with your homeowners policy. Find out if you already have identity theft coverage.

"It's not always automatically included," says Andrew Franken, Wisconsin Insurance Alliance. "We encourage people to read their homeowners policy, talk to their agent, ask those questions. Is it covered how much and what does it cover? If not, they can ask if there's an endorsement available and they can shop around."

Franken says identity theft insurance typically costs $25-$50 a year for coverage on a homeowners policy.

"The monitoring doesn't pay for getting your credit back, your identity back, some of the payouts, or losses you may have, legal costs, those type of things," says Franken. "Insurance covers all of those losses depending on the coverage an individual chooses."

You can also subscribe to identity theft monitoring services which charge a monthly or annual fee that can run hundreds of dollars.

Monitoring tries to identify fraudulent new accounts and alert you to them.

Ask questions about exactly what the service provides, if legal costs are covered, and what type of reimbursement it includes.

Bach says, "You also want to ask, 'Is this just going to reimburse me for expenses I incur getting my identity back, or will it actually reimburse me for any losses I incur from the identity theft?'"

Consumer experts say much of the monitoring you can do yourself.

Set up alerts on your credit or bank accounts.

Review your statements, check accounts for unfamiliar charges.

Check your credit reports from each of the three bureaus. It's free once a year, so spread them out. Check one report from each credit bureau every four months.

Don't let paying for a service give you a false sense of security.

"I don't know that any one of them can keep your identity from being stolen," says Bach.

The non-profit National Identity Theft Resource Center says when shopping for these ID protection services, make sure the price is clearly disclosed. Find out of there are add-ons charged, and ask if the service is offering a promotional rate that changes after a certain period of time.

The non-profit's president, Eva Velasquez, released a statement to Action 2 News in regards to identity protection services:

"These services can often provide consumers with information that they could obtain themselves for free, however, it can take time to do the leg work. For consumers that have the means to pay for a service and they believe there is value in receiving assistance rather than doing it themselves, we strongly recommend that they look at multiple services and understand what is being offered. If they understand what they are receiving and what the actual cost is, then they can make an informed decision regarding the value of the service to them. It’s important to not abdicate all responsibility though. Just because you now have a service or product that is assisting you with minimizing your risk of identity theft, you shouldn’t just throw caution to the wind. We liken it to auto insurance. Just because you have automobile insurance doesn’t mean (for most people) that you will now drive in an irresponsible manner. You still have to take personal responsibility for how you handle your vehicle. It’s the same with your identity.

While they have value and can often provide a useful and legitimate service, consumers must still remain vigilant about protecting themselves. Things like changing their passwords often, and making strong online passwords are not within the scope of these offerings. It is a big mistake for consumers to abdicate all responsibility because they have purchased one of these services. They are but one tool in the tool cox.

Consumers that do not have the disposable income to pay for such a service should not despair! Organizations like the ITRC, and government agencies like the FTC have a lot of free resources and services that they can take advantage of, they will have to invest the time in doing the follow up."

IMPORTANT LINKS:

National Identity Theft Resource Center: http://www.idtheftcenter.org

Federal Trade Commission Advice on Protecting Your Identity: http://www.consumer.ftc.gov/topics/protecting-your-identity

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