Understanding Identity Theft Protection Services

 

IDENTITY THEFT BREACHES

Identity theft breaches are on the rise.  It has become common to hear about breaches of security taking place with major corporations.  As these corporations have a ton of our personal data stored, our information has become more readily available to scammers.

CREDIT MONITORING

There are a variety of different identity theft protection services offered, each with their own nuances.  Let’s talk about monitoring services first. Credit monitoring essentially tracks the activity on your credit report at either one, two, or all three of the major credit bureaus: Equifax, Experian, and TransUnion.  The monitoring company looks out for a variety of different things on your credit report including: mistakes, new credit inquiries, new loans, changes to your personal information, etc.  Credit monitoring services can only warn you about the activity that shows up on your credit report, so they act as more of an alert system.

IDENTITY MONITORING

Identity monitoring is a service that alerts you when your personal information such as bank accounts, social security number, driver’s license, passport, medical ID number, etc. are used in a way that doesn’t generally show up on your credit report.

IDENTITY RECOVERY

If you are in fact a victim of identity theft, an identity recovery company will help you regain control of your name and finances after the theft occurs. So, while this service can’t prevent identity theft, it can be a very useful resource if you become a victim.  These companies can assist with matters including drafting correspondence, contacting creditors, and helping you to freeze your credit.  If you grant an identity recovery company the authority to act on your behalf, they can provide additional services.

IDENTITY THEFT INSURANCE

Identity theft insurance is like any other insurance policy.  This service is offered by most of the major identity theft protection services.  This insurance generally covers only the out-of-pocket expenses that are directly related with reclaiming your identity.  This is a really important point to understand, because some people are under the misconception that this insurance will automatically cover all financial loss resulting from the theft. Before deciding on which identity theft insurance to purchase, be sure to find out exactly what it covers so there are no surprises later.

EMPLOYER BENEFITS

If you are unable to pay for identity theft protection services on your own, you should check your employer provided benefits.  More and more employers are offering identity theft protection services as part of their overall benefits package.  Obtaining this service through your employer will likely enable you to purchase it at a discounted rate.

FREE SERVICES

You can get a free copy of your credit report by going to www.annualcreditreport.com.  Generally speaking, you can obtain one free credit report a year where you have access to the three different credit bureaus.  However, because of COVID-19, you are currently able to get weekly credit reports. Many credit card companies and brokerage accounts also offer free credit reports, so be sure to check into these options as well.

Review your statements on a regular basis – at least monthly.  Doing this will allow you to view any potential unauthorized charges and address them immediately. Even an explanation of benefits from your health insurance company should be thoroughly reviewed.  You may come across a listed service that you never actually had.  This could be a result of someone using your identity, or a mistake from your healthcare provider.  Either way, the sooner you know, the sooner you can fix it and save yourself money.

Place a freeze on your credit.  You just have to contact each credit bureau, which can be done via phone or online at any time.  This blocks anyone from accessing your credit report without your permission.  When locking your credit, you are provided with a PIN option or online access that has to be used to unlock your credit at any time, even by you. So let’s say you want to apply for a credit card.  You would call or login to each of the credit bureaus’ sites, enter your PIN, and your credit is then unlocked.  Once you obtained the credit card approval, you would then re-freeze your credit until you needed it the next time.  This approach will not prevent you from utilizing your current lines of credit, only from obtaining new ones without your permission through the use of the PIN.

My recommendation is to freeze your credit, and add another layer of protection whether it’s credit monitoring, identity monitoring, identity recover, or identity theft insurance.

FEDERAL TRADE COMMISSION (FTC)

The FTC has a website: www.identitytheft.gov which offers some great resources. If you are a victim of identity theft, this site will walk you through a series of steps to help get you started. The site offers tools such as pre-filled letters and templates for the different credit bureaus.

IDENTITY THEFT VICTIM

If you are the victim of identity theft, the first thing you should do is put a freeze on your credit.  Contact all of your creditors to notify them of the situation. Contact the companies managing your bank accounts, retirement accounts, etc. as well.  Utilize the www.identitytheft.gov site to help navigate through the process.  They may recommend that you file a report with your local precinct and contact the DMV as well.

WHEN SHOULD YOU SPEAK WITH A CERTIFIED FINANCIAL PLANNER™ PROFESSIONAL?

Now!  Some people are under the assumption that you have to be rich to have a financial planner.  There are others who believe they only need to speak with a financial planner if they’re having a serious financial issue.  Neither is true.  Regardless of your economic situation, a financial planner can help you in truly significant ways.  Whether you have a lot of money, a little bit of money, a lot of debt, no debt, unsure about your employer’s 401K options, or any other money related issue, a financial planner can help you navigate through all of these things and put you on the road to achieving your financial goals.  Even if you feel very stable with your finances, a financial planner can help you sustain the progress you’ve already made.

WHERE TO GO FROM HERE?

Listen to the On My Way To Wealth Podcast for additional information and specific examples.           Want to receive my e-book with free money tips for Gen Xers? Click this link:  www.buildabetterfinancialfuture.com  Consult with a Certified Financial Planner™ professional as he/she can provide you with the knowledge and expertise critical to help you Build A Better Financial Future!

THANK YOU!

As always, thank you for checking out my podcast and blog post!  If there are any topics you would like to learn more about, or if you would like to schedule a free financial consultation with me, please email me at Luis@onmywaytowealth.com!  All of my podcast episodes can be found at www.onmywaytowealth.com and on all major podcasting platforms.  For my business site, please be sure to check out www.buildabetterfinancialfuture.com.  I look forward to helping you Build A Better Financial Future!