New Report Compares, Examines Credit Monitoring Programs
A March 2009 report from the Consumer Federation of America has weighed paid-for services v. do-it-yourself identity protection, with revealing results.
Comparing sixteen anti-ID theft services, the CFA report reveals that some may have misstated information during the time period they were studied (Sept. 2008-Feb. 2009) and lists steps that be taken independently, at no cost to the consumer.
At the same time, the report notes the enormity of the problem of identity theft and acknowledges that some services do much more than simple credit monitoring, making them a good choice for some consumers.
Let’s take a closer look at what credit monitoring programs can and can’t do so you can make the decision whether to be a credit protection maverick or rent a monitoring “posse” of your own.
A Time Commitment
So…should you or shouldn’t you? How big a problem is ID theft, anyway? And how much should you pay for protection…or is it better to take matters into your own hands?
To be realistic, the best candidate for an at-home, self generated protection program is organized, has relatively few financial accounts to keep track of and has enough time at his or her disposal to make routine, detailed checks of each, as well as checks of his medical records and online usage of his name.
He should also have a financial “cushion” to fall back on in the interim should identity theft occur. Keep in mind that resolving a case of ID theft in your favor could potentially involve legal fees depending upon what the crook attempts in your name.
For example, most credit cards offer reimbursement for some or all of monies spent fraudulently against the victim’s account. Banks, too, will typically investigate a question of fraud and may return the full amount to the account holder.
However, complex crimes or those that involve large chunks of money at a time can be more difficult to unravel.
For instance, a mortgage of $400,000 can’t simply be dismissed because the victim claims fraud; it must be proven in court (hence, the legal fees) and involve investigations of each step of the process (another legal matter).
And there have even been cases where innocent individuals were arrested due to another’s misdeeds in their name, another issue that could be costly, as well as emotionally devastating, to overturn in the court of law.
Out of Time
But perhaps the single most frequently cited reason for purchasing protection is the time and effort it can take to resolve identity theft issues on one’s own.
A recent FTC survey showed that the average ID theft cost the victim only $550 to resolve. However, it also involved a whopping 116 hours. That time was spent laboriously obtaining and copying documents, including police reports; travel; court dates and copying and forwarding court records.
And that’s on top of the time already routinely spent going over one’s accounts transaction by transaction at least monthly, checking utilities and medical records against the possibility of fraud, and sorting through internet search results (a service certain ID protection companies, such as TrustedID, offer) to see whether one’s name may be being misused during the prevention process—which, though an enormous step toward protection, can still sometimes fail.
Steps to Take
If you’ve decided to work independently to protect your own credit, do your homework. Find out how others have been successful—and where they’ve failed. Read as many articles as possible on ID and credit protection as you can and put together a solid plan that includes specific times during the month that you will gather receipts and double check transactions (write these on a calendar or have them pop up as reminders on your computer).
You’ll also want to be certain to order credit reports annually (these are free once a year) and immediately investigate any suspicious activity. Don’t forget to also check into any alternate names you may have or have had in the past (for example, a “Jr.” suffix or a maiden name or an Americanization of an ethnic name).
If you opt for a monthly or annual fee credit monitoring service, look for reasonable rates. Be absolutely certain of what services the program offers and what additional measures are in place, such as customer service and legal help.
Find out in advance how and when credit reports are requested by the monitoring service (since you’re entitled to only one a year from each reporting company, if the service has already requested one, the next you order will no longer be free).
Also be wary of free trials; read the fine print. Free trials can be fine, but not every credit monitoring service is reputable, and the CFA report notes that in the wake of rising ID theft reports, more and more such programs are popping up. Check the service’s history: how long has it been in business? What is its track record for prevention?
The right credit monitoring service is only as good as its own reputation—but the right pick can save you time, money and headaches. Remember, no ID protection company can offer an absolute guarantee that you’ll never become a victim, nor can your own efforts, no matter how painstaking, offer a similar guarantee. But you can significantly lower your chances of becoming a victim with the right steps. Start now…and be safer tomorrow.
