Keeping your personal information secure is becoming extremely challenging in our increasingly digitized world. Identity theft is soaring, and the market for identity theft protection is soaring with it. But is identity theft protection worth it, and do you need it?
What is Identity Theft?
Before we delve into the details, let’s understand what identity theft means. The umbrella term covers crimes committed using a person’s personal identifying information (PII), such as social security numbers, driver’s licenses, debit and credit card details, passwords and PINs, banking information, and much more.
Identity thieves can exploit such data by opening new bank accounts and lines of credit using your information. Criminals could make unauthorized withdrawals or transfers from your account or make illicit and unauthorized purchases through stolen card details. They could obtain medical care using your insurance details or file a tax return in your name and claim your refund. They may simply sell your information to others.
You might not even realize that you are a victim of identity until much later when the damage is already done. Not only can this lead to substantial economic damage, but it might also even lead to an arrest warrant being issued in your name.
Many people assume that identity thieves are high-tech “hackers,” but that’s often not the case. Many thieves get personal information by raiding mailboxes, sifting through garbage, looking for discarded statements, or calling victims up and impersonating a representative of a financial institution.
There are multiple types of identity theft and methods thieves use to steal your identity. You can protect yourself by knowing the signs of identity theft and what to do if you’re a victim. Some people want or need additional protection, and that’s where identity theft protection services come into the picture.
Did you know: In 2021 alone, 1,434,698 Americans reported identity theft.
What Do Identity Theft Protection Services Include?
Identity theft protection services monitor public databases, social media, and the dark web to find out if a customer’s data is published there or not. They also monitor customers’ credit reports to identify unusual activity and send requisite alerts. Theft protection agencies typically offer three-bureau monitoring services to ensure prompt identification of any out-of-the-ordinary transactions or activity.
Identity theft protection services can detect many complex fraudulent activities that you might not pick up yourself, such as falsified invoice frauds, which will most likely pop up on a monitoring agency’s radar. Such theft agencies employ seasoned trackers that can generally sniff out any suspicious activity as soon as it occurs, thereby allowing clients to minimize losses.
Identity Theft Protection vs. Credit Monitoring: Which is Better?
Credit monitoring focuses exclusively on the surveillance of credit reports. The majority of personal identity theft involves financial data breaches, which are likely to appear on the victim’s credit reports.
Identity theft protection services provide much more comprehensive scrutiny. They can track and report identity theft before it appears on credit reports, making them more effective. They can also detect forms of personal identity theft that do not involve credit transactions, such as direct debits from bank accounts, crypto scams, tax identity theft, and the sale of personal information on the dark web.
Identity theft protection is also much more expensive than credit monitoring.
Credit monitoring is often free. You can monitor yourself directly simply by reviewing your credit reports on a regular basis. Many bank accounts, credit cards, and loans also bundle credit monitoring with their account perks. Before you pay for credit monitoring services, see if you’re entitled to get them for free.
The Bottom Line
Identity theft protection is comprehensive, effective, and expensive. Do you really need it?
If you believe you are a victim of identity theft or have had any confidential document stolen, or if you have reason to believe that you are at risk or that information has been compromised, it might make sense to opt for a comprehensive theft protection package. The platforms, which track social media, public databases, and the dark web, and monitor your personal accounts, can alert you instantly in case of any suspicious activity.
People who are not in immediate jeopardy should evaluate the pros and cons of both services before making a decision, as identity theft protection services are costly.
As more financial institutions have begun offering credit monitoring for free or bundled up with other services, low-risk individuals can protect themselves reasonably well by taking basic precautions and monitoring their credit.
The key to making the right decision for you is assessing your risk realistically and weighing it against the cost of full-scale identity theft protection.