In today's marketplace, there are a growing number of companies offering services aimed at helping consumers fight against identity theft. Fortunately, there are also steps individuals can take to help reduce their risk of becoming a victim.
In this article, we're going to explain some of the measures everyone can take to decrease the risk of a thief stealing their identity. In doing so, we're first going to talk about the services that are provided free-of-charge as well as those for sale. Later on, we're going to discuss some of the simple precautions everyone can take to help lower their risk of falling prey to a thief.
Roughly five different types of preventative services are offered on the marketplace today:
Each of these services offers the consumer a slightly different form of protection.
For a small fee, credit-reporting bureaus offer consumers the ability to freeze their credit report. Also referred to as a report lock, or credit lock, this service stops all access to this information. By locking an account, the consumer prevents thieves from opening an unauthorized line of credit.
While a freeze is effective at preventing thieves from opening a new account in the consumer's name, it does not prevent a thief from accessing an existing account. It's also somewhat inconvenient for consumers, since they must pay a small fee of around $10 each time they want to lock or unlock their report.
This service provides insurance coverage for expenses incurred following the theft of someone's identity. Coverage is normally purchased as a rider on a homeowners insurance policy, and the premium can range from $10 to $100 per year, depending on the deductibles chosen.
This insurance doesn't provide coverage for losses incurred as a result of a theft. It only provides coverage to restore someone's identity. As is the case whenever buying insurance, it's important to understand the extent of the coverage provided, as well as the deductibles that may apply.
If someone's identity has been stolen, or they have reason to believe it's been stolen, it's possible to have a fraud alert placed on a credit report. Once on a report, potential creditors must either contact the victim directly, or use what is referred to as "reasonable policies and procedures" to verify identity before issuing credit.
Once again, one of the drawbacks of this service is it does not prevent thieves from accessing an existing account. However, fraud alerts are effective at protecting a credit score from further damage in the event it has been stolen.
For about $15 to as much as $100 per month, it's possible to find a wide variety of service providers that will monitor a credit reports, and provide an alert if changes are made to the account. Typically, the service will only monitor one of the three credit reporting bureaus. For example, each of the three major credit-reporting agencies offers this service:
Each credit bureau offers monitoring services for the information they collect, and many creditors do not report to all three bureaus. To ensure a credit report is protected at all three bureaus, a consumer may have to subscribe to three different services.
This type of company checks the Internet for listings of personal identifying information. If the client's personal information is found on the Internet, this service company will alert them to the potential fraudulent use of their information.
Data-sweep services can cost nearly $100, and cover a wide-variety of online information such as public records, email addresses, as well as real estate transactions.
As promised earlier, we're also going to discuss some of the simple precautions anyone can take to help lower their risk of becoming a victim of identity theft. Perhaps the most effective approach is to be cautious when it comes to giving out personal information. That simple rule of thumb sounds easy enough to follow, but what are some of the ways it's possible to practice this technique:
Thieves are always devising new ways to steal someone's information. Emails, fraudulent websites, and even outbound telephone calls are commonly used to obtain personal information. Most companies, and especially companies offering financial services, will never ask its customers or potential customers for personal or bank account information via emails, telephone calls, or letters.
About the Author - Fighting Identity Theft