Identity theft protection services monitor your accounts, spot fraud, and recover your stolen identity. And since the coronavirus pandemic hit the U.S., the Federal Trade Commission has seen over 1,800 reports of identity theft.
And with so many people out of work and desperate for financial help, we’re likely to see many more cases.
Some scammers are running stimulus check scams to get personal information. Others are scamming people who are trying to file for unemployment benefits. This is an unfortunate reality we have to deal with right now.
But what about those identity theft protection services? How do they work? Are they worth it? And what can you do on your own to protect yourself from scammers who are trying to steal your identity?
Identity Theft Protection During the Coronavirus Pandemic
What is identity theft?
Identity theft is when someone uses your personal information – name, date of birth, Social Security number, credit card number, etc. – without your permission. You can wind up with damage to your credit score or financial losses.
Scammers can get your information in a few different ways. Some scammers run email and phone scams where they convince people to offer up private information. Some hack websites. And there are even scammers who fish personal information out of the trash, like bank statements or other sensitive documents.
After scammers access your personal information, they can use it to open new credit card accounts, make purchases, or get a tax refund.
Unfortunately, the coronavirus crisis has provided new opportunities for scammers to prey on individuals: from people trying to “help” you get your stimulus check to fake COVID-19 testing sites.
How to protect yourself from identity theft
There are a few different things you can do to protect yourself from identity theft. There are even companies that you can pay to do a lot of this stuff for you (I’ll get into that a little further down).
Here’s how you can protect yourself from identity theft for free:
- Always be careful about how and where you share your personal information online, both on a computer or phone. You’re at a higher risk if you’re using a shared network.
- Protect your wifi at home by using a unique password, and don’t include personal details in your network name (like your address).
- Make sure all of your online passwords are unique, and it’s best if you use different passwords for all of your accounts. It’s not as easy to remember, but it’s safer. You can consider using a password manager like Dashlane or LastPass to help you organize your passwords.
- Having a secure home mailbox will make it harder for people to steal credit card statements, bank statements, or tax documents.
- Shred any documents that list personal information.
- Regularly check your credit reports. The FTC recommends using AnnualCreditReport.com to receive a free credit report annually from each of the three major credit reporting bureaus, and Mint.com offers free monthly credit reports for its users.
- Remember that legitimate companies and organizations will not ask for your information via phone or text. A bank, credit card company, or the government will already have that information.
- Limit your exposure by not carrying around your Social Security card or all of your credit cards.
- Keep sensitive documents, credit cards you aren’t using, Social Security cards, and other personal information in a secure place.
Another really powerful way to prevent identity theft is to put a freeze on your credit reports. It’s free and prevents scammers from opening up a new credit card in your name. It doesn’t prevent thieves from using any of your existing accounts, so keep monitoring those. But the idea is that you put up a barrier to anyone opening a new account.
You are given a PIN (personal identification number) when you place a freeze on your reports, and you’ll need to use that if you want to lift the freeze. You can freeze your reports by contacting each of the credit reporting bureaus at:
- Equifax: Equifax.com/personal/credit-report-services, 800-685-1111
- Experian: Experian.com/help, 888-EXPERIAN (888-397-3742)
- Transunion: TransUnion.com/credit-help, 888-909-8872
Those things are all easy to do, but a lot of people don’t take identity theft seriously until something bad actually happens to them. You have to be vigilant about protecting yourself, because the sad reality is that thieves are working hard to get hold of people’s information.
M$M tip: Keep your information safe and ready in case of an emergency with the Family Emergency Binder. It’s an easy way to organize all of your family’s personal information. Learn more at In Case of Emergency Binder Review: Get Prepared for 2020.
What identity theft protection services do
Next to the DIY options I just explained, there are a number of companies that offer identity theft monitoring and recovery services and identity theft insurance. Let me explain what all of that means…
Monitoring services watch for signs that your personal information has been compromised, and there are two different types: credit monitoring and identity monitoring.
- Credit monitoring pays attention to what’s happening on your credit reports that might look like potential fraud (a new loan, your credit report is pulled, credit limit changes, personal information changes, changes to your credit score, etc.).
- Identity monitoring alerts you when your personal information – bank account information, Social Security number, driver’s license, or passport – is used or changed. This is stuff like change of address requests, orders for new utilities or wireless services, check cashing requests, unusual social media activity, etc.
An identity theft protection service might bundle monitoring services and personal information you’ve provided them, and then checks databases and credit reporting agencies to see if there is any new or inaccurate information. You are alerted if there is any activity that looks fraudulent.
This kind of identity theft protection helps you regain control of your personal information if it is stolen and misused. A trained professional will walk you through the process and help you write letters to debt collectors and creditors. They may even represent you in legal proceedings.
Identity theft insurance
Most identity theft protection services offer some kind of insurance plan as well. It’s meant to cover out-of-pocket expenses related to reclaiming your identity, like postage, notary costs, and sometimes lost wages or legal fees.
Identity theft insurance typically doesn’t cover any money that’s been stolen from you. And it also comes with some kind of deductible and limitations to its coverage.
Identity theft protection services: free and discounted services
Because the coronavirus has caused financial stress for so many Americans, a couple of companies are offering free or reduced fees for identity theft protection services. This can be a huge relief as scams are on the rise.
Allstate Identity Protection
Allstate is waiving fees for both its Premier and Essentials individual and family and protection plan until December 31, 2020. You have to sign up by May 31, 2020, to qualify. Both of these services offer:
- Data breach alerts
- Bank account monitoring
- Dark web monitoring
- Social media monitoring
- High-risk transaction monitoring
- Lost wallet assistance
- Recover services
- Coverage for out-of-pocket expenses
- Stolen funds reimbursement
LifeLock is a well-known identity protection company that currently has discounted rates for the first year of service. They have a variety of plans running from as little as $9.99 to $29.99/month.
One of the most popular plans is Select (currently $9.99/month) which comes with:
- Credit bureau monitoring
- Data breach notifications
- Dark web monitoring
- USPS address change verification
- Identity and Social Security number alerts
- S. based identity restoration specialists
- Security and a VPN for up to five devices
- Reimbursement of stolen funds up to $25,000
- Personal expense compensation up to $25,000
- Coverage for lawyers and experts up to $1 million
Identity Guard has plans for families and individuals ranging from $8.99/month to $34.99/month. These plans are all 33% off for a limited time.
All of Identity Guard’s plans include dark web monitoring, risk management reports, safe browsing tools, and an anti-phishing mobile app. Higher-level plans include additional features, like:
- Monthly credit score
- Address monitoring
- Tax refund alerts
- Social insight reports
- Credit monitoring from each of the three bureaus
- Up to $1 million in identity theft insurance
Is identity theft protection worth paying for?
Free and discounted options make identity theft protection a much more viable option for many people, and that’s great. But what about paying full price for identity protection services?
The first thing you need to be aware of is that identity theft protection cannot actually prevent a criminal from stealing and using your personal information. These companies alert you to the issue and help you resolve it.
Identity theft protection services are really best if:
- You’ve already been the victim of identity theft or a data breach. You’re at a higher risk if your information has already been compromised in some way. There are several different websites out there that can help you figure out if your data has previously been breached.
- You’ve lost your Social Security card. This is why you don’t keep your card in your wallet, but I still know a lot of people who do.
- You don’t want to put a freeze on your credit reports. Because it places a barrier for others to open a line of credit, it places one for you too. You will have to use your PIN to temporarily lift the freeze if you want to apply for a loan, open a new credit card, or even apply for some jobs.
- You know you won’t actively monitor your accounts and credit reports.
If you do pay for identity theft protection, what you really want to focus on are credit monitoring, identity monitoring and alerts, and identity recovery. You also want to avoid any companies that make it sound like they will fully protect you – the FTC has cracked down misused marketing terms like “prevention.”
Identity theft protection services offer peace of mind. You know someone else is watching your personal information for you, and that someone will be there to help if your identity is stolen. You’re the one who has to decide if that’s worth paying for.
The final word on identity theft protection
Whether you pay for services or not, you have to take the necessary steps to limit your risk. A lot of this stuff is common sense, but some of it isn’t. Pay attention to the tips I outlined in this article to protect yourself.