To the world at large, you may be John Smith from Pocatello, Idaho or Jane Doe from Peoria, Illinois. However, the bank knows you as account holder 3548-39486, the federal government sees you as 123-45-6789, and your favorite social networks identify you as TooManyCats67.
What we're discussing here is personal identity, and it’s one of the most important aspects of anyone's life.
If your identity were to be stolen, all sorts of bad things could happen.
A scammer could make unauthorized cash withdrawals from your bank account.
A thief could use your personal information to apply for a loan or credit card.
An imposter could pose as you, submit fraudulent tax returns, and steal your return money.
But that’s not all. Some identity thieves use a process called social engineering to trick their victims into revealing sensitive information. You may have heard of the telephone scam in which a thief asks a yes/no question, records the victim’s voice saying “yes,” and uses that “voice signature” to authorize charges.
Still others thieves may take a more “old fashioned” tack, rummaging through your garbage in search of old credit card statements or hacking into your online accounts to gather the personal identification details.
No matter how they do it, the problem of identity theft is real, and it can be devastating.
Experts urge people to monitor their personal and financial activities carefully, reporting any suspicious or unauthorized activity as soon as it’s noticed.
Using sensitive information provided by clients, identity theft protection companies create secure accounts that collect and report any suspicious activity.
However, by the time the average ID theft victim receives his or her bank statement or credit report, the damage has often already been done — and the identity thief has long disappeared.
Thankfully, there is a glimmer of hope for people suffering this increasingly common crisis: the hope provided by professional identity theft protection companies.
These companies provide clients with a variety of safeguarding options, from basic financial monitoring to credit repair to legal recovery.
They cannot prevent identity theft from occurring, but they can help you spot it before it grows out of hand. Some can even help you recover from the damage that identity theft causes.
Identity theft is a criminal activity involving the unauthorized use of a victim's personal information.
It can be as simple as a forged signature on a check or as sophisticated as a large-scale operation involving thousands of compromised credit card accounts.
Criminals obtain sensitive information such as Social Security numbers, bank account information, online passwords, and “challenge question” answers. They use that stolen information to create entirely new accounts under the victim's identity.
This form of theft is notoriously difficult to prevent and prosecute, and it creates billions of dollars in financial and personal damages every year.
Take care not to inadvertently share the answers to your security “challenge” questions on social media. Just one photo or reminiscent post about your first pet, Snowball, could supply identity thieves with the information they need to hack your bank account.
Even the most conscientious consumer in the world can fall victim to identity theft.
Seasoned computer hackers know how to compromise an entire store chain or credit card company, creating thousands of victims in a single day.
Fortunately, you can take proactive steps to protect yourself from identity theft before it happens.
We’ll discuss the ins and outs of contacting a professional ID theft protection company in a moment.
But first, here are a few no-cost tips you can follow to enhance the protection of your identity.
Having your social media account hacked may not sound like a big deal, but the personal information it contains (age, location, hobbies, employment, etc.) could lead to bigger problems.
Your bank records all incoming payments and outgoing charges placed on your account. However, not all banks have the ability to flag unusual transactions. Banking customers can protect themselves from many fraud and identity theft situations by choosing a bank that offers free monitoring services.
This applies to many of the documents that pass through your hands every day, from unsolicited credit card applications to paycheck stubs. Identity thieves only need a few pieces of personal information to ply their trade, and many people have no idea how much ammunition they throw out with the trash.
Many identity thieves rely on their victims’ poor security habits. For example, some people use the same password for multiple accounts. This is not wise, because if one account is compromised, every other account using that password is also at risk.
Don't rely on the bottom line or final balance to tell the whole story. Sometimes, an identity thief will make a very small purchase on a compromised credit or debit card to establish its validity. The victim may not even notice a $1.59 charge at a local convenience store, but this could be a setup for an unauthorized $900 purchase at an out-of-town electronics store later on.
To set up an account, you’ll have to share some sensitive personal information with the company. Don’t do this until you’re certain you’ve found the company you want to hire.
Once you’ve decided to hire an ID theft protection service to help safeguard your personal information, the first thing you must realize is that there is probably no such thing as a “brick-and-mortar” office. Because most of the work is done through secure online databases, virtually all ID theft protection services conduct business through the phone or online communications.
To initiate an account with a company, you must contact a representative through a toll-free number or secure website. Your initial meeting should be more of a fact-finding mission than a commitment ceremony; after all, it pays to shop around. Ask the representative the following questions.
What services does the company offer?
How much do they charge for these services?
Are there long-term service contracts involved?
Is this a monitoring service or a recovery service?
Protect yourself from identity thieves who rifle through your trash. Hire a commercial shredding service to destroy your sensitive documents, or invest in a good paper shredder.
The account representative should clearly answer all of your questions and explain everything that will happen once you hire them.
Once you’ve signed on, you’ll be asked to share some sensitive personal information with the company; they need this info to set up the account.
Notably, most identification protection services gain direct access to only your most basic account information. As such, the company and its members do not have the ability to withdraw funds or make unauthorized purchases.
After your account is set up, the company will monitor the activity on your accounts and reports any suspicious activity to you.
Critics of ID theft protection services often point out that customers can do much of the work themselves without professional help. This is true in a number of cases, but identity theft protection services typically have access to public and private databases not readily available to consumers.
What’s more, many people simply prefer to hand over the responsibility of monitoring their numerous accounts to someone else. After all, it can be a very time-consuming activity.
However, you must be aware of the type of protection you’re buying when you hire an identity theft prevention company.
Some companies specialize in monitoring client accounts, and others offer recovery and legal services. The difference between these two service levels is very important.
Don’t sign on with the first ID theft protection company you contact — at least not right away. Shop around, comparing prices and levels of service until you find what’s right for you. For example, some monitoring companies send a monthly activity report or provide a secure online dashboard for clients.
If a suspicious transaction is detected, a company offering recovery and legal services can take direct action on behalf of the client.
For example, the transaction can be cancelled or reversed, and a full investigation into the theft will be initiated by the company, not just the bank's loss prevention department.
Even if the financial institution declines to remove the charge, the identity theft protection company itself may reimburse the victim and provide credit repair services at no additional charge.
However, this level of service can be costly, and the actual number of suspicious transactions may be low.
While a bank or credit card company may have its own policies concerning charge reversals or legal relief, an identity theft monitoring service is not obligated to cover any losses.
A monitoring service gains access to the client’s personal accounts and monitors them for suspicious activity, such as a large credit card purchase in a foreign country. This information is passed on to the client in the form of a red flag warning.
Often, it falls upon the client to pursue further action if an unauthorized transaction occurs. The company itself will not contact the financial institution or pursue legal action against the thief.
A monitoring service generally costs less than a recovery service. Fees range from about $20 to $30 per month.
Once a company begins monitoring your accounts for suspicious activity, you’re free to conduct financial and personal business as usual. If any suspicious transactions occur, a customer representative will contact you directly via phone or email.
For example, if a thief tries to submit a credit application using your Social Security number, the company will detect it and immediately contact you to verify the validity of the activity.
Meanwhile, clients are urged to educate themselves on the dangers of identity theft and to take steps to reduce their chances of victimization.
Some companies offer customers a more advanced package of recovery and legal services. Basic monitoring is also usually included. A monitoring service is like a second set of trustworthy eyes watching over your sensitive personal information. A recovery and legal relief service is more like a bodyguard that watches over you and takes action as needed.
While the prevention of identity theft is a lifelong concern, some clients choose to terminate service for various reasons.
Sometimes, the benefits of basic monitoring simply don’t justify the monthly expense. A new bank or financial institution could offer free monitoring services for customers, reducing the need for outside providers.
Extended periods of inactivity can also make clients question the need for ongoing monitoring or legal protection.
The best identity theft protection services provide a way for customers to opt out of their contracts. When shopping for a service, find out about the terms of the service’s contract.
Sometimes, the client must fulfill certain financial obligations before termination of service can take place. Other times, the company will modify the terms to allow clients to opt out early. It pays to ask these questions before signing on the dotted line.
It’s unfortunate but true: identity theft happens. We can’t completely prevent it from disrupting our lives, but we can take steps that help us nip it in the bud and protect ourselves from the ill effects of it.
At BestReviews, we understand that it’s important for consumers to safeguard their assets.
If you’re considering hiring an identity theft protection company, please keep the helpful tips and other information from this article in mind as you set about your journey to find the perfect identity theft protection company.
At BestReviews, we purchase every product we review with our own funds. We never accept anything from product manufacturers. Our goal is to be 100% objective in our analysis, and we do not want to run the risk of being swayed by products provided at no cost.