Identity Theft Protection Services
Frequently Asked Questions about Identity Theft Protection Services.

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What is identity theft?

Identity theft is the fastest growing crime in the United States. The FTC estimates that 9 million Americans have their identities stolen each year. Identity theft occurs when thieves use your personal information (such as your Social Security number or driver's license number) to gain access to money, credit, goods or services in your name. Since your name is used for these activities, companies come to you seeking repayment of the money or goods that were illegally obtained. While legally you do not owe anything, it can often be difficult to prove this and it can take months and even years to get everything straightened out, costing you a huge amount of time and resources. In the meantime, you can be left with no access to credit as credit card companies, banks, utilities (phone, cell phone, cable) and other financial institutions can cut off your credit accounts until your good name is restored. Many people have actually been arrested and jailed because an identity thief committed crimes in their name.

How does identity theft happen?

Identity thieves can get access to your personal information in myriad different ways. These include:

• Stealing mail
• Copying down or taking pictures of your information in a retail transaction
  
• Data breaches at companies that have your information
  
• Stolen wallets or purses
  
• Documents thrown in the trash by you or a business that has your information (dumpster diving)
  
• Computer viruses
• Phishing
• Intercepting data form insecure networks or sites
• Overhearing or hacking into phone conversations
• Pretexting, meaning use false pretenses to get your personal information from companies that have it (financial institutions, utilities, etc.)
• Changing your address through a change of address form in order to divert billing statements from your home to an address the thief controls

What do thieves do once they steal my identity?

Identity thieves continue to come up with new ways to benefit from your stolen identity. The most common thing an identity thief does is open up a new account in your name. This can be a credit card account, a bank account which they use to write bad checks, a phone or wireless phone account, or a utility account such as heat, electricity or television. The thief then racks up charges in your name and never pays them, leaving creditors to come after you. Another common tactic is to take out a loan in your name for something like a car or even a house. Identity thieves also commonly use your identity in dealings with the government. The purpose of this can vary from receiving benefits in your name (such as Social Security, or even a tax refund) to avoiding prosecution by giving police your information when arrested. Of course, when you don't show for the court date, a warrant is then issued for your arrest! We could go on, but suffice it to say, there are hundreds of ways for an identity thief to benefit from using your personal information.

How can I prevent identity theft?

Signing up for one of our recommended services is the best way. Each service is different and different ones may be best for different people. Some services, such as LifeLock and TrustedID are what we call "preventive" services, meaning they are great for preventing ID theft before it can happen. Other services, such as Identity Guard are what we call "detection" services, which mean that they detect that someone is trying to steal your identity and help you catch it before it harms you, but they don't try to prevent it altogether. See "What type of identity theft protection is right for me?" for help on which type of solution you should get. In addition to signing up for one of our recommended services, there are many things you can do to help prevent identity theft:

• Carefully monitor your credit report for any suspicious activity (many of our recommended identity theft services do this, as do all of our recommended credit monitoring services.)
• Always shred documents containing personal or financial information.
• Only put your name on your checks - don't include your Social Security number, address or even your phone number.
• If you receive preapproved credit offers (many of our recommended services stop these from being mailed to you), make sure you destroy them.
• Don't carry your Social Security number, birth certificate or passport in your wallet.
• Don't mail anything from your personal mailbox unless it has a lock.
• Carefully review all monthly financial statements (credit cards, bank accounts) to be sure there is no fraudulent activity.
• Never give out personal information over the phone unless you are absolutely who you are speaking to.
• Never give out personal information on the Internet unless you are absolutely sure you are on a trustworthy website.
• Do not click links from emails to get to an online account - it may be a fake email directing you to a counterfeit site (phishing). If you think the email is legitimate, type in the web address of your account yourself.

What type of identity theft protection is right for me?

"Preventive" identity theft protection services, like TrustedID and LifeLock, are a very strong form of protection. Both place a fraud alert on all of your credit files (TrustedID also allows you the additional and more extreme option of placing a credit freeze on your credit files) which means that anyone opening a credit account for you must make an extra effort to confirm your identity, usually by calling you to verify that you opened the account. We recommend this type of service for most people who are concerned about identity theft, but it does come with some drawbacks. Mainly, it makes it a bit harder for you to open credit accounts, as you must first wait to be contacted by the new account grantor, which can sometimes take as long as a few days or longer if the grantor can't connect with you. For those who want to take a less extreme approach or who also want to have the benefit of keeping close tabs on their credit reports and scores, a "detection" type service is a great approach. These are credit monitoring services that monitor your credit file as well as the Internet black market for any unusual activity occurring in your name. They also give you regular updates of your credit reports and credit scores. While detection of something means that your information has already fallen into the wrong hands, it almost always occurs before the situation has become a more serious problem and it is not as difficult to deal with. A "detection" service is good for someone who opens credit accounts often but is not overly concerned with identity theft.

What do I do if I think I am a victim of identity theft?

If you are a member of one of our recommended identity theft services, call your service provider immediately and they will help you handle the situation. Similarly, if you are a member of one of our recommended credit monitoring services, call your service and they will help you take care of the situation. If you have not subscribed to one of our recommended services, visit the FTC's site for instructions.

What is a fraud alert?

A fraud alert requires each of the three credit bureaus, Experian, Equifax and TransUnion, to use "reasonable policies and procedures" to verify your identity before opening an account in your name. This usually means that they will call you to confirm that you did indeed request that a new account be opened. An initial fraud alert remains on your account for 90 days and thus must be re-requested every 90 days if you want to continue to have this protection. Two of our recommended ID Theft services, LifeLock and TrustedID will automatically request and re-request Fraud Alerts for you every 90 days.

What is a credit freeze?

Some, but not all states allow you to place a credit freeze with the three credit bureaus. This means that no new creditors will be able to access your credit report for any reason. Any new account that you or a potential identity thief try to open will simply not be opened. In order to place this freeze, there is usually a fee of around $10 that must be paid to each credit reporting agency. So it would cost around $30 to completely freeze your credit. If you actually do want to obtain credit, you must unfreeze your credit, which may also have a cost associated with it. Then, to freeze it again incurs another charge. Obviously this is not very convenient but if you are currently a victim of identity theft or recently had personal information stolen, it may be a good option. TrustedID, one of our recommended services, provides an easy, automated way to freeze and unfreeze your credit.

Can I protect my entire household with a family plan?

TrustedID is the only identity theft protection service reviewed on NextAdvisor.com that offers a true family plan. This plan covers any family members that live at the same address, including your spouse, children, elderly parents or other family members. LifeLock does not offer a true family plan, but customers are encouraged to enroll each of their family members during the initial sign up process. Each adult family member will be subject to the full individual price, but children can also be added for a lower price of just $22.50 per year or $2.25 per month, after the exclusive NextAdvisor.com 15% discount. ProtectMyID does not offer a family plan, either, but they do offer regular subscribers an add-on plan for children called ChildSecure. For $6.95 per month, in addition to the base ProtectMyID adult subscription, ProtectMyID will closely monitor all of your enrolled children's credit information and alert you if someone applies for credit or opens checking accounts using your children's personal information.

Can money lost due to identity theft be recovered?

Most of the identity theft protection services reviewed on NextAdvisor.com guarantee a certain amount of money, usually up to $1,000,000, to cover the costs associated with restoring your identity. These guarantees do not, however, cover money that has been lost.

Since you are not legally responsible for paying any fraudulent debt accumulated by an identity thief, the only money that is likely to be lost would be funds withdrawn from your bank accounts. It is up to your bank or financial institution to restore money that has been stolen from your accounts. Many banks voluntarily offer zero-liability policies, which means that they are effectively promising to replace any stolen funds. Visa and MasterCard also offer zero-liability policies, which extend to debit cards as well as credit cards. The money in your bank account is also federally protected, to an extent. If your debit card is lost or stolen, your liability is limited to $50.00 in losses, as long as you report the loss to your bank within 2 business days. If you report the loss within 60 calendar days from the time your bank statement is mailed, your liability is limited to $500.00. Federal protections are a bit more generous in the event that your debit card number is stolen, as opposed to the card itself.

How can I protect my children from identity theft?

TrustedID's family plan includes protection for your children. TrustedID safeguards children's identities by requesting their credit reports, Social Security statements and medical benefits statements to make sure no one else has been using their information, as well as scanning black market Internet sites to see if any of their information is compromised. LifeLock also protects children's identities, allowing adult subscribers to add children's coverage for a low price. ProtectMyID offers an add-on plan for regular subscribers called ChildSecure. ProtectMyID closely monitors all your enrolled children's credit information and alert you if someone applies for credit or opens checking accounts using your children's personal information.

How do the ID theft insurance/guarantees work?

Many identity theft protection services offer a service warranty or guarantee of around $1,000,000. This means that if your identity is stolen while you are a subscriber, the identity theft protection service will spend up to $1,000,000 in order to restore your identity. These guarantees do not cover funds that are stolen from you, only the out of pocket cost of restoring your identity. Identity recovery expenses can include such things as legal fees and, in certain cases, lost wages.

Will an ID theft protection service help me restore my identity if I do become a victim?

Most of the identity theft protection services reviewed on NextAdvisor.com guarantee a certain amount of money, usually up to $1,000,000, to cover the costs associated with restoring your identity. Identity recovery experts will advice you on your options and leverage their network of resources in order to help restore your identity. Each service approaches identity recovery and restoration differently, so it is important to research each service to understand what it does and does not cover in the unfortunate case that a subscriber does become a victim.

Will an identity theft protection service hurt my credit score in any way?

No, subscribing to an identity theft protection service will not negatively impact your credit score. When you authorize a lender to check your credit, it is called a "hard pull," which may cause your credit score to drop slightly. However, if you check your own credit, or an identity theft protection service checks your credit report on your behalf, this is known as a "soft pull," which does not hurt your score.

How does NextAdvisor.com come up with its reviews?

We thoroughly test and research all the services in the category. We order each and every service ourselves and test out every feature available. We contact customer service and cancel and reorder each service to make sure that process works as well. After our initial tests, we continue to use all the services and update our reviews as situations change. We also monitor the providers' sites for any service changes or specials. In addition, we research each provider by reading all news and ordering and reading third-party research reports. We only include providers on our site that we believe offer a good value proposition. If there is a provider you know of that is not on our site, you can be fairly certain we did not rate that provider highly enough to include in our comparison. If you think we are missing a quality provider or have any other suggestions or comments, please visit our contact us page.