How to Choose an Identity Theft Monitoring Service
A “Shopping Guide” for Consumers
Identity theft monitoring services typically monitor individuals’ credit reports for any activity, including inquiries and new accounts opened. Some services go beyond credit reports and monitor other types of consumer reports, as well as a wide variety of private and public records. Any anomalies found could be a sign that the individual is a victim of identity theft. Identity theft monitoring services don’t prevent identity theft, but they can serve as an early warning system so that you can prevent further harm from occurring.
Most people don’t need to purchase an identity theft monitoring service. Consumers nationwide can get three free credit reports a year – one from each of the three credit bureaus: Equifax, Experian, and TransUnion – to watch for signs of identity theft and other types of fraud. We recommend staggering the requests so that one report is issued every four months. That way, you can monitor your credit reports on an ongoing basis. For more information about this and other no- and low-cost alternatives, read our Fact Sheet 33: Identity Theft Monitoring Services.
However, there may be a variety of reasons that you would want to subscribe to a monitoring service. You might simply feel more comfortable knowing what is going on with your credit report and other types of consumer reports 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.
If you’re thinking about purchasing identity theft monitoring services, there is now a “shopping guide” that will help you choose the best service for you. The Privacy Rights Clearinghouse (PRC) participated in a task force hosted by the Consumer Federation of America to develop a set of guidelines for the identity theft monitoring industry. Members of the task force, which included industry, consumer, and government representatives, researched the industry for 16 months and recently published Best Practices for Identity Theft Services (PDF). The report provides a blueprint for what identity theft monitoring services should be doing.
“In recent years, some identity theft monitoring services have been criticized for misleading marketing and exaggerated protection guarantees.” said Beth Givens, director at Privacy Rights Clearinghouse. “These guidelines will help consumers make informed decisions when selecting such services by outlining industry best practices.”
The best practices are composed of 24 guidelines governing marketing practices, how services are explained, and fraud assistance services. Highlights include:
- Misrepresentations about protecting against identity theft. Identity theft service providers should avoid making claims that would lead consumers to believe that they can provide complete protection against all forms of identity theft, detect all instances of identity theft, or stop all attempts to commit identity theft – claims that no service can legitimately make.
- Testimonials and use of statistics. Identity theft service providers should be careful in using testimonials and statistics to ensure that they are not misleading.
- Disclosures. The best practices call for clear disclosures about costs, cancelation and refund policies, how to resolve complaints with the service, and other important information.
- Program features. Identity theft service providers should clearly explain how the features of their programs work and how those features may help consumers.
- Protecting individuals’ information. The best practices recommend that identity theft service providers have clear and transparent privacy policies, use reasonable and appropriate safeguards for individuals’ personal data, and be careful about sharing it with others.
- Fraud assistance. Identity theft service providers that offer assistance to victims should explain what they do to help them and any limitations or exclusions that may apply.
- Insurance and guarantees. Identity theft service providers that offer insurance or guarantees should make thorough and accurate information easily available about what the policies or guarantees provide and any limitations or exclusions that may apply.
- Powers of attorney. Powers of attorney should only be obtained when needed to help customers who request assistance and should be used only for that purpose.
You can use these best practices as a shopping guide. First, research the website of the company you’re considering. See if it adheres to these guidelines. If you don’t feel you’ve gotten all the answers, call the toll free number listed on the site and talk with a representative of the company. Ask them if they have adopted the best practices either in full or in part. In the end, you will need to determine the criteria that are most important for you to make the best decision for your situation.