Dealing with Identity Theft
In today’s world where online shopping and paperless data storage reign supreme, identity thieves are becoming more and more sophisticated in their hacking. It is therefore more important than ever to keep your identity safe, with the help of improved protection services as well as prudent self-monitoring.
What Is the Difference Between Services?
Unfortunately, identity monitoring services only alert you to a problem. They don’t actually protect you from getting your identity stolen. Identity theft resolution and recovery services actually work to fix a problem if you become the victim of identity theft.
You can use a variety of free tools to monitor your credit and help get you through the process:
- Monitor your credit report. Usually identity thieves are trying to use your credit cards or open new ones in your name. You can review your credit history for free at least four times per year by using www.annualcreditreport.com and by visiting the websites of each of the three main credit bureaus: Experian, Equifax and TransUnion. You can self-monitor or use a full-service monitoring company that will alert you if there is suspicious activity on your credit report so that you can handle the situation.
- Monitor your financials. A full-service monitoring program will monitor your credit cards and bank accounts outside of your credit report, as well as search for loan applications being filed in your name.
- Monitor your personal information. A good full-service monitoring program will also monitor hacker websites for your Social Security number and driver’s license number, and look for address changes that you did not authorize.
- Provide security software. Many of the better identity protection services will provide you with computer software to help safeguard against hacking.
- Resolution services. If you are alerted that your identity is stolen, the biggest drain on your time, energy, and financial and emotional health will be trying to resolve the issues and get your identity back. A good resolution service will provide you with some financial insurance protection and do the work to recover your identity.
The Best Identity Theft Protection Services
Identity theft services come in all shapes and sizes so that you can customize your protection to your own needs. Here are some we recommend, depending on what you are looking for:
- Credit score apps. Download a free app like Credit Karma or Bill Guard to your phone and you will be able to monitor your credit score for free. The app should also show how many credit accounts are open in your name, your payment history, your average age of credit, credit inquiries you may have had on your accounts, and overall credit utilization. Check your score once a week, as that is how frequently it will update. This is a great, free way to do your own credit monitoring.
- Full-service credit monitoring. If you want someone to do the monitoring for you, you can pay for services like Identity Guard or LifeLock. For about $20 a month, these services will do the monitoring so that you don’t have to. They will monitor everything related to your identity, including your credit, name, Social Security number and public information associated with you, and will alert you to any suspicious activity. They will also provide you with antivirus, password protection and keystroke encryption software for your computers. Finally, they will provide you with $1 million in identity theft insurance to cover expenses resulting from identity theft, as well as act as a resource in how to handle the identity recovery process. Note that we recommend one of these services only for the extremely busy or if you know your information has already been stolen, as they are quite expensive for a service that you can pretty much do yourself.
- Resolution services. This is the most important service. If you are worried about how to handle the process once your identity has been stolen, consider purchasing this “insurance” plan (which is actually a services contract). Your homeowners insurance may have an identity-theft add-on, but make sure the insurance actually handles every step of the resolution process. If not, consider a company like Zander Insurance Group. For $6.75 a month, Zander will assign an expert recovery advocate from ID Experts to handle all phases of recovering your identity, including filing paperwork, handling fraud disputes and removing fraudulent transactions from your credit report. Zander will also reimburse you up to $1 million in stolen funds, lost wages, expenses and legal fees. Zander will also provide you access to a wide range of resources for monitoring your information. If you are mostly worried about dealing with the stressful process of getting your identity back (which really is the worst part of being an identity theft victim), using a recovery service, together with a free credit score app, will be your best bet.
Tips to Reduce Your Risk
Even if you don’t take advantage of one of the identity theft services out there, here are some helpful tips that you can do on your own:
- If you think you may have had your information stolen, set up a free fraud alert with one of the major credit bureaus (Equifax, Experian or TransUnion). If you set it up with one bureau, it will automatically inform the other two. Once the alert is placed, creditors must take extra steps to verify your identity before any new accounts can be opened.
- If you know your sensitive information has been hacked, you can freeze your credit with each credit bureau. There will be a small charge, but the freeze will restrict access to your credit report and make it nearly impossible to open a new account. You can remove the freeze at any time.
- For extra protection, use different, complicated passwords for all your accounts. This way, if one account is hacked, the others may not be. You can download a free password manager (like “Last Pass” or “Pass Diary”) to keep all your passwords in one place. The app will usually allow you to generate a random password for any given account. That way, you will have to remember only the one password to get into the app. Stop using passwords that people can guess based on your Facebook profile, and stop using computers that are over three years old or do not update security software on a daily basis
Identity theft can be a stressful experience to anyone it happens to. With these services and techniques, you should be able to take the proper precautions and lessen the risk of it happening to you.