ID theft protection services are not one-size-fits-all

August 30, 2011

With an unprecedented string of major data breaches this spring from Sony to Citi and many in between, identity theft protection services have a greater import than ever before. Data-theft victims have a far higher likelihood of being a victim of identity theft than do those whose data was not taken.

But what can protection services do for you if you have had your data stolen? And what can they do for you if you are not at risk from any specific data breach? The multitude of offerings claiming to help can be a confusing mish-mosh of good and bad that takes some work to sort through. And since the services typically cost $10-$20 a month, you should know what your investment buys you before you sign up.

“It’s very difficult for the consumer to really figure out what it is and what services they’re getting,” says Phil Blank, managing director of security risk and fraud for Javelin Strategy & Research, which released a new report on the offerings in the identity theft protection industry. The report says the industry will take in $3.5 billion this year from consumers. About 25 million people have credit monitoring subscriptions, according to Javelin.

Javelin found that more of the offerings were comprehensive — providing monitoring, protection and resolution assistance — and are now even being wrapped together with computer anti-virus tools. The report recommended the industry move to more standardized descriptions and focus less on hype and more on honesty when marketing their products.

The good news from Javelin’s study is that the field is rapidly evolving and adapting to the changing threats. “It’s important for the consumers to know that it’s not one-size-fits-all,” says Blank. “Security is a multi-layered approach.” Because the industry is still young there are new offerings and different approaches being tried all the time. Many services come with free trials that last two weeks to two months, and Blank suggests taking one for a test spin before subscribing.

One trend forecast in the report was the offering of minimal free identity theft services as a means of marketing. AllClearID offers a no-cost subscription (they don’t even ask for a credit card), that provides some basic protection but has none of the bells and whistles of the pricier offerings.

Even looking at just one company can take a little effort. Identity Guard, for example, has four different plans consumers can choose from. Some other popular brands are LifeLock, TrustedID and Privacy Guard. All three of the credit bureaus, Experian, Equifax and TransUnion also sell their own identity theft protection services.

Some of the services are now offering protections connected to social media usage because so many people expose so much personal information through Facebook, Twitter and their ilk. It’s still too soon to really evaluate how the companies are doing in terms of protecting consumers from giving out too much information that can potentially be seen by crooks. But Blank says those in the 18-24 age group are the most vulnerable because they seem the least aware of the risks.

“The younger the individual the less awareness they appear to have to threats associated with online activities,” he says.

But there is some evidence that precautions are working overall. Blank says the amount of money lost to fraud is less when a consumer uses one of the services than if they don’t. “Even some amount of protection is better than none,” he adds. “If this were to happen you would want someone on your side who can help you resolve this.”

That still doesn’t make it perfect. For one thing, consumers can’t really compare one service to another since they don’t define the offerings the same way. Even worse, they can make what sounds like the same offer but is anything but.

An example is when one of the services offers one or more free credit reports if you sign up. What some don’t make readily apparent, he says, is that they’re using the free credit report you’re already entitled to once a year from each of the major credit reporting agencies.

If they’re giving you something you can already get for free, it’s not really such a great deal.

The Privacy Rights Clearinghouse, a consumer advocacy group on the issue of identity theft, says that most people don’t need identity theft protections services and can use the free credit reports to alert themselves to warning signs that someone might be accessing their credit.

But Amber Yoo, a spokeswoman for the group, says that doesn’t mean there’s anything wrong with getting one of the services. She quotes a recent report by the Privacy Rights Clearinghouse: “You might simply feel more comfortable knowing what is going on with your credit report … and don’t mind spending $120 to $240 a year to purchase such a service. Or you may suspect that someone who means to do you harm, such as a former spouse from a bitter divorce, might attempt to illegitimately access your credit reports.”

Privacy Rights Clearinghouse also participated in a Consumer Federation of American project that offers a guide for how to evaluate the services. Among the recommendations:

  • Be clear about the costs, cancellation and refund policies.
  • Be sure to understand the features of the program being offered.
  • Learn about the companies policies for dealing with your personal information and whether they’ll be sharing it with others and, if so, why.
  • If fraud assistance, insurance or guarantees are offered, be sure to find out the limitations and exclusions.

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Protecting your identity online is a fallacy. No matter how many times you check your credit report, by the time you find out about it, you are already toast. The key is focusing on resolution services, the kind that wraps you in a safety net of coverage to restore your identity back to its re-incident state. One service that makes this their focus is I get a monthly statement letting me know my status through their cyber monitoring, which helps, but the thing I feel most at ease about is the level of training and professionalism of their Resolution Specialists. One toll free call and they handle all the details. If Citi or Sony or any company you have ever bought anything from gets hacked, you cannot protect yourself and need to have ID Theft coverage to ensure you can identify it and stop the bleeding fast.

Posted by Jim_915 | Report as abusive

Such a great info! its help me a lot..thanks for sharing! keep it up ya.

Posted by identity407 | Report as abusive