Consumer guide: Protecting yourself vs. paying someone else to do itby Elizabeth Dunbar, Minnesota Public Radio
St. Paul, Minn. — Consumers considering signing up for a fee-based credit monitoring or identity theft protection service through a bank or credit card company want to know one thing: Is it worth it?
Jay Foley, executive director at the national Identity Theft Resource Center, says signing up for a service is a matter of personal choice. But he had several tips for anyone thinking about it.
Don't pay for a service that claims it can "prevent" identity theft. You can decrease your risk of identity theft by doing things like shredding documents with personal information and being careful about what personal information you divulge online and elsewhere. But no one can truly prevent your identity from being stolen, so anyone who claims they can do that is lying.
Monitoring your credit is easy to do on your own. Some people just don't have time to monitor their own credit. Those people might be better off paying for a credit monitoring service. But if you want to monitor your own credit, you can get a free copy of your credit report from each of the three major credit bureaus at annualcreditreport.com. You can do this once a year, but Foley said you could stagger your requests to each bureau, allowing you to look at a new credit report once every four months. In addition, if you suspect fraud or identity theft and file an alert with the credit bureaus, you will be entitled to free copies of your credit reports. Some banks and credit unions offer their customers free credit reports, but that's rare.
Ask yourself if freezing your credit is an option. In Minnesota, you can pay a $5 fee to each of the credit bureaus to "freeze" your credit. The fee is waived if you're a victim of identity theft. Freezing your credit means no one can take out credit in your name until you unfreeze it. This might be a good option for someone who doesn't plan to take out any loans or sign up for a new credit card.
Evaluate the protection service before signing up. What is it offering to do? If all it does is monitor your credit, you might think about whether you can do that on your own. A service can help detect problems early, but Foley said that doesn't always matter in the long run. If you decide to sign up for a service, Foley recommends one that will not only monitor credit and watch for fraud, but also will monitor your personal information online and look for places where an identity thief could prey on your information.
Be prepared for marketing pitches. Foley believes banks will start to market protection products more often because they are looking for new revenue streams. Consumers should be aware of the possibility and read the fine print. Sign up for a protection service only after you've decided for yourself that you need it.