How Identity Theft Protection Services Work to Protect You

In the United States alone, an estimated 15 million consumers are the victim of identity theft each and every year. Given the ultra-connected environment in which we live, it is no surprise that cyber criminals are constantly on the hunt for gaps in security systems of companies operating online and in physical locations.

Data breaches take place in both government and private organizations, regardless of size or industry, and consumers fall victim to phishing scams and other unsavory activities regularly. Individuals who have been the victim of identity theft pay the price when new accounts are opened in their name, and credit is used without their knowledge.

Preventing identity theft is big business as more information is housed online, and consumers need a way to protect their confidential financial and personal data. Identity theft protection services have become increasingly popular to accomplish this task.

Levels of Identity Theft Protection

Identity theft protection services, made available through companies like Identity Guard and LifeLock work in similar ways to safeguard consumers from the consequences of a lost or stolen identity. Unfortunately, there is no fool-proof method to prevent identity theft, but the services offered by major companies provide peace of mind for monitoring activity, and recovering losses should identity theft take place. Each service varies slightly in how much protection it offers, but in a nutshell, identity theft services offering the following:

Credit Monitoring

Through credit monitoring, companies are given permission by consumers to sweep credit reports constantly, looking for activity that may be the result of a lost or stolen identity. Companies that offer credit monitoring services may check one, two, or all three of the major credit reporting agencies. If an activity that seems out of the norm takes place, consumers receive an alert and prompt to check the item for accuracy.

This may include a new loan or credit card, a new collection account, a public record or bankruptcy filing, or a legal judgment made against the consumer. Credit monitoring services do not alert consumers to money movement in a bank account, making recovery services a necessity for some.

Identity Monitoring

Similar to credit monitoring, identity monitoring services check the major credit bureaus for activity about an individual’s personal details. When a change is made to an address, a new utility is connected to a consumer’s social security number or name, a payday loan is taken out, or a change to social media is identified, identity monitoring services alert the consumer of the change and request verification that it is valid. These services are often packaged with credit monitoring services at an additional cost.

Recovery Services

In addition to credit and identity monitoring, recovery services have become an increasingly important aspect of safeguarding a consumer’s financial well-being. Companies provide recovery services through a network of case managers or trained counselors who work specifically to address the consequences of identity theft after it takes place.

Writing letters to creditors, managing debt collectors, placing freezes on credit reports, and offering guidance on documents that need to be reviewed or submitted to the credit agencies are all recovery services made available through major identity theft companies.

Some services include a limit of up to $1 million to help consumers recover after identity theft which helps pay for the time necessary to rectify the situation and coverage of financial losses.

Identity Theft Insurance

Some identity theft service providers also offer insurance against identity theft which covers out-of-pocket expenses associated with recovering a lost or stolen identity. These costs may include postage, notary charges, lost wages and attorney fees, but each insurance policy differs in its scope of coverage. Identity theft insurance may not compensate consumers for stolen money resulting from identity theft, and policies may have a deductible to be paid by the consumer prior to any benefits kicking in.

Final Thoughts on How ID Theft Protection Services Work

Identity theft is a growing problem throughout the world, creating the need for services to help monitor activities and recover losses when it takes place.

Identity theft protection companies offer a range of products, typically sold through a subscription-based plan, to protect consumers from identity theft consequences, but it is important for individuals to take control over their information as well.

Checking credit reports once every year is a necessary step in the fight against identity theft, as is creating passwords for online accounts that are as secure as possible.

The combination of these steps and identity theft services help consumers achieve a safer environment for transacting business online or elsewhere.