Identity Theft Protection Is Mostly Bullshit
A few months ago, I received a notice in the mail that I was involved in a data breach that had been settled by a large multinational telecommunications company . Like many people involved in such calculations, I was not offered a ridiculously small amount of money as a reward for being an unwitting victim. Instead, I received a near-useless gift of free identity theft protection.
Identity Theft Protection (ITP) services promise to monitor your financial and online life (so often intertwined these days) and alert you if your personal information is compromised to steal your identity. This can include anything from using your credit card to make illegal purchases to more complex schemes that use your information to borrow money or open accounts in your name, which can ruin your credit history and leave you with a huge mess that need to be removed.
Considering the damage that identity theft can do to you, paying for ITP seems like a pretty good idea. But the point is that although there is nothing wrong with do, you don’t need them , because you can do almost all the important things yourself – for free.
What does an ITP do?
It is important to note that identity theft protection is not the same as identity theft insurance . The latter covers you against financial losses incurred if your identity is stolen, while the former alerts you to the possibility that this is happening to you. It’s also important to note that ITP doesn’t always do anything to stop identity theft – it just monitors aspects of your life for signs of it and then alerts you to those signs so you can take action.
Typically, ITP services track:
- Credit reports for new accounts or other suspicious activity (however, not all ITP services monitor all three major credit bureaus).
- Social media accounts for your personal information such as phone number or social security number.
- Dark websites that serve as data brokers trading in stolen personal information.
- Your financial accounts for suspicious withdrawals or unauthorized access.
Some of these services will simply alert you when something alarming is found, while others will go further and take proactive action, such as removing your information from known sites that sell stolen information.
Many ITP services also offer recovery assistance and some form of identity theft insurance. The Norton LifeLock service, for example, offers up to $1 million to “lawyers and experts” hired to help clear the clutter and up to $25,000 in reimbursement under their cheapest tier. Given that you can lose a lot of money if someone steals your identity, this is a nice feature, but not all ITP services offer insurance and refunds, so you need to read the fine print.
Is ITP worth it?
On the one hand, identity theft protection services obviously provide some benefit. They can automate some of the work of protecting yourself and offer an extra level of vigilance as well as help and compensation if you get caught stealing your identity anyway.
But ITP services mostly offer post facto alerts – they don’t really do much to prevent your information from being shared. And there are many reasons why you should not pay for ITP services:
- They are not magical. Having ITP services doesn’t mean you don’t have to do anything. You still have to wade through alerts (sometimes there are a lot of them, which can lead to ” alert fatigue ” which defeats the purpose) and alerts often arrive too late – by the time the service alerts you that your social network is disabled. there, it’s there . And if you need to recover from identity theft (even though you have an ITP service), you also have to put in the effort – ITP services can help with recovery, but you still have to do the legwork. It is often better to practice proper personal information hygiene beforehand .
- You can do most of this yourself, for free. You can access your credit report for free once a year. And you should! This is a quick and fairly simple operation, and at a glance you can see if someone has opened a credit card or taken out a loan in your name. In fact, the number one best way to stop people from stealing your identity is to freeze your credit , which will prevent anyone – even if they have your personal information – from getting a new credit card or loan. While this doesn’t protect you from all types of scams , it does eliminate the most common vectors that identity thieves use.
- You may already have it for free. If you were involved in a data breach, you may already have access to ITP services, just like me. In fact, the way companies just give away ITP every time they screw up makes you realize how “valuable” these services really are. In addition, many organizations offer ITP as a benefit – for example, if you’re an AAA member , you can get ITP as a free add-on.
- You can perform the recovery steps yourself, for free. Identity theft recovery is challenging, but the ITP service won’t do anything you couldn’t do yourself. The government essentially maintains a website designed to help you figure things out and take action to resolve the situation.
- Your personal liability is often limited. For example, if someone gains control of your credit card, your personal liability is legally limited to as little as $50, no matter how much the perpetrator actually charges your card, and most banks or credit card issuers will simply refuse fraudulent payments. until you dispute the charges within 60 days of the date of issue.
At the end of the day, identity theft protection is like a car alarm: it can make you feel better psychologically, but it doesn’t really do much . As with many other things, if you have extra money to protect against identity theft, there is nothing wrong with paying for it. But all you really have to do is follow a few simple steps regularly and you’ll do everything these services promise just as well, maybe even better, since you’ve got the skin in this game.