Identity Theft Protection Guide: Does It Really Work?

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By Keith Morris

Topic:  ID Theft

January 20, 2022

Unfortunately, in this digital age, ID theft is a common occurrence. It can happen to anyone, anywhere, at any time. Data breaches make their way into the news every few months, and financial hacking headlines appear regularly.

No one likes to consider the possibility that someone will steal their identity and open fraudulent accounts, and it can have devastating financial and emotional consequences when it does happen. 

One solution to provide you with peace of mind in these circumstances is to sign up with this service. These companies can provide far-reaching security benefits and, for a certain segment of the population, they really work and are well worth the monthly or annual fee.

Types of Identity Fraud

Tax Identity Theft

Identity theft involving taxes is a form of fraud that happens when someone steals your personal information, including your Social Security Number. If a criminal gains access to this information, they can file a tax return for a refund. They can also commit tax fraud that can result in stolen or delayed refunds.

While a fraudulent tax return may seem like a worst-case scenario, criminals can also use these details for other personal gains, including obtaining employment. If you discover that an identity thief has used your Social Security Number and additional personal information, all income they receive under your name must be reported immediately. You’ll most likely notice this fraud when you file your taxes and your taxes have already been filed and the income doesn’t match what you’ve earned.

Tax-related identity theft can significantly impact your future finances, so it’s essential you are aware of the signs to reduce the likelihood of it happening. Several strategies you can employ to decrease the risk of tax identity theft are:

  • File your tax return early.
  • Use long and complex passwords for online accounts.
  • Only use reputable and trusted tax professionals when filing your returns.
  • If you prefer paper returns, send them through certified mail.

Child Identity Theft

Child identity theft is one of the most common types of identity theft and one of the easiest ones to spot. If a thief uses a child’s Social Security number, they can apply for government benefits, open credit cards and bank accounts, rent somewhere to live, and even apply for utility service or a loan.

Parents often discover this type of theft is when credit cards or bills arrive at home addressed to a child, or you receive notices or statements from the IRS suggesting your child hasn’t paid their taxes.

With school forms requiring personal and sensitive information, it’s essential for parents to be aware of how the details are collected, stored, and disposed of. You can also ask your child’s school to ensure their information is safeguarded, as this can minimize the risk of this type of fraud.

Child identity theft most often occurs because children don’t have an established credit history. If you fear your child has become a victim of this type of fraud, you can report the criminal activity to the company where the fraud occurred as well as the police. This ensures that your child isn’t liable for any fraudulent returns and ensures the account is closed.

Read MoreLifeLock Family Plans Review.

Medical Identity Theft

This type of fraud occurs when criminals use someone else’s insurance number and name to make doctor’s appointments, get prescription drugs, receive other forms of care, and file claims with insurance providers. If your health information is stolen, your future treatments, payment records, insurance, and credit reports can be compromised.

If you suspect someone has stolen your medical identity, it’s essential to get copies of your medical records. These records will show what medical information was sent, on what dates, and to whom, and allow you to spot any errors or suspicious activity. If you find anything unusual, report them to your healthcare provider and correct them immediately.

Driver’s License Theft

This type of fraud happens when a thief obtains a driving license issued to them under someone else’s identity. Thieves often use this type of fraud when committing traffic violations that can compromise your future license. Violations committed under your name have the potential to end up on your record, potentially causing you to lose your license.

Driving license theft can also open you up to other types of fraud. From fraudsters using your driving number to opening up bank accounts, financing a car, and taking out phone contracts. This type of fraud can leave you liable and responsible for debts accrued through fraud.

Read MoreWhat to Do When You Lost Your Wallet.

Change of Address Fraud

One of the lesser-known types of identity theft is change of address fraud. Identity thieves can change your mailing address and divert it to themselves instead. As a scam that gives criminals major access to sensitive data, it begins with someone figuring out your full name and address. The thief can then submit a change of address using a form through the US Postal Service. They can then forward your mail to their personal address and gain access to all your personal detailsFrom banking information to other sensitive documents, change of address fraud is a simple process that can compromise your personal finances.

Thankfully, this type of fraud doesn’t work if someone tries to change your address online. This is because the online change of address systems requires digital payments that cross-reference and check your bank accounts.

However, if someone applies for a change of address through the mail, it is easier to become a victim of this type of fraud without raising any major suspicions.

Avoid being a victim of these kinds of frauds by getting precautionary measures, one good way of it is having identity theft protection program with you.

What are ID Theft Monitoring Services?

These companies keep an eye on your personal information, starting with credit and identity monitoring to alerts, all the way through to recovery services if needed. 

Credit Monitoring

You grant the company access to your credit reports, and they monitor them for as long as you designate, which is usually a year but can be monthly. You need to clarify with the company you choose which credit bureaus they monitor: Experian, TransUnion, or Equifax. It’s preferable they monitor all three. The monitors will look for things like opening a new credit card or loan account, notices of late payments, a filing for bankruptcy, legal judgments, a change in credit limits, and personal information change requests.

Identity Monitoring

This service focuses on your personal information, such as your social security number or driver’s license. Close monitoring looks for address change requests, new utility orders, arrest or court records, payday loan applications, and so forth.

Alert Notifications

When your personal information is used to open new accounts, or there’s an influx of new credit inquiries, the company will send an alert, notifying you of the new action on your credit. They will also notify you of questionable activities, such as new utility account requests.

Recovery Services

When your identity is stolen and results in fraudulent use, like running up debt on a credit card you didn’t open, the company assists you in repairing your credit and may help you recover any lost funds. Some of these companies can also represent you to the creditors.

ID theft monitoring companies may also offer insurance policies in case identity theft results in high losses. More services include keeping you up to date on the latest identity theft news or monitoring dark web sites where stolen financial and personal information is exchanged.

Benefits of Identity Theft Programs

Dark Web Monitoring

Most banks do an excellent job of quickly letting you know if a fraudulent credit card transaction has been made in your name. However, they don’t usually monitor your information for appearing on the dark web, which is the part of the internet where hackers and other criminals buy and sell information.

When your credit card number, password, Social Security Number, or other personal data appears on the dark web, you need to act fast to secure your information and change what you can. Identity theft monitoring programs scan the dark web to give you this critical warning ahead of potential fraud. Without it, you might end up reacting to fraud events instead of proactively avoiding them.

Fast Alerts

Identity theft programs can be configured to send you textemailor app alerts as soon as they detect possible fraud. They may ask you to confirm a recent transaction, line of credit, state identification card, or another event linked to your credit card or Social Security Number.

These alerts often come through minutes after a transaction occurs, but depending on the reporting method, they may come a few days or weeks later. By reviewing these alerts as soon as you get them, you can make sure your financial and personal information stays out of the wrong hands.

It’s essential to ensure the alert is authentic before providing any information, especially if the alert is coming via phone call, email, or text message. If in any doubt, you can call the identity theft monitoring provider directly instead of responding to the messages from them. They’ll be able to confirm the events or give you more information about what to do next.

Read More: Check out our blog for more articles

Expert Assistance

In some cases, the aftermath of a fraudulent loan or transaction caught by an identity theft monitoring program can take weeks to repair. This is especially true if the criminal managed to commit multiple fraudulent acts in a short period.

Many identity theft programs have experts on hand to give you personalized assistance when their systems detect fraud. They can help you reach out to banks and other creditors to clear up any new accounts that have been opened. They can also help you communicate with the major credit bureaus to remove incorrect information from your line of credit.

Plus, these experts work behind the scenes to investigate the fraud themselves and identify steps you can take to prevent a recurrence. They can also report the information to law enforcement to help them identify the criminals and even recover some of your money.

Protecting Childrens’ Future

Child identity theft is a growing problem because of how easy it is for someone to take out a line of credit in a child’s name. Because credit bureaus can’t verify all the information of someone who’s opening a line of credit, they don’t always realize that the Social Security Number and name in use belong to a child.

This type of fraud isn’t always preventable just by being careful about your child’s information online. In some cases, a child’s relatives will steal the identity and abuse it.

Thieves love to use children’s information because they have a clean line of creditAlthough they won’t have much beneficial credit history yet, thieves can build that up briefly before bringing it crashing back down by running up fraudulent charges.

Funds Reimbursement

If your identity is abused, you can send a letter to notify the banks and other institutions. Usually, they can cancel the charges. However, some charges are more difficult to erase than others. In cases where nobody detects the fraud right away, you might end up on the hook for at least part of the bill.

Some identity theft programs include insurance that protects you if the fraud is not caught in time. You may use this money to cover fraudulent charges, legal fees, or both, depending on the terms and conditions of the program. This peace of mind is a massive relief for growing families who need to cover current and future expenses like college and retirement.

Crime and Medical Identity Theft

Although financial identity theft is commonplace, two sneakier forms of theft are even harder to catch on your own. Criminal identity theft involves stealing someone’s identity for committing a crime. This makes it much easier for the criminal to flee while out on bail, leaving you stuck with a warrant out for your arrest.

Medical identity theft involves a criminal posing as you, to access your medical benefits, often because they have your insurance membership ID card or number. This identity theft usually works by billing your existing medical insurance plan, but sometimes the thief will sign up for a government program in your name. Medical insurance fraud can continue for years unnoticed, especially if the insurance company never catches on.

This kind of situations can be really serious in the long run that’s why you might want protection as early as now. There’s a lot of great companies that offer security like Lifelock ID theft protection programs and some other good options.

Identity theft programs sometimes stop this type of theft from occurring in the first place by notifying you when your personal information has been found on the dark web. Other times, the program may notice new public records related to an arrest in your name or medical debt sent to collectors.

Who Will Benefit?

While everyone can benefit, their services are especially beneficial in certain situations, including:

  • If you are at high risk or are already a victim of identity theft.
  • If you are notified of a data breach which may include your information but not offered free credit monitoring as a result.
  • When you resist putting a freeze on your credit.
  • When you don’t have the time or know you cannot consistently follow through with actively monitoring your credit.

How Does Identity Theft Happen?

To reduce your risk of identity theft, it’s important you are aware of the invisible and silent signs of online fraud and learn how to protect your personal information.

Phishing Scams

Phishing is a method in which scammers try to gather your personal information without you realizing it. They use deceptive websites and emails that trick you into giving away your details, with some phishing scams not even requiring you to input any information.

The goal of phishing email attacks is to trick the recipient into believing the message inside is something they need or want. For example, emails could professionally replicate requests from your bank or a message from an employee of your bank asking you to download an attachment or click a link. These emails may look legitimate on the surface, with the phishing attackers often disguising themselves as a trusted figure or a company you would happily conduct business with.

The next time you receive an email claiming to be from your bank or an established company asking for your details, do not comply straight away. Instead, analyze the email and determine whether the source is trustworthy.

You can tell a phishing email from an authentic email with a few key indicators.

  • A legitimate company will never ask for your personal information via email.
  • The logo and other brand identifiers in a real email match those of the company website.
  • An email from a real company will use a genuine domain name. For example, terry@paypal.com may be legitimate, while terry@paypal123.com is not.
  • The spelling and grammar in an authentic email is correct.

When visiting websites, you should also ensure they are genuine and not replicates of trusted companies. Many phishing scammers create cloned websites that produce pop-ups, with the cancel button often leading out into an external site that has the potential to then hack your computer and gain access to all the information you have stored. Reliable websites typically begin with https://, whereas less secure sites may have http://.

Public Wi-Fi

Free public Wi-Fi may seem convenient when you’re out, and you exceed your data usage. However, it can be a goldmine for hackers and identity thieves to access and steal personal information without you ever knowing.

One of the biggest dangers of using public Wi-Fi networks is that they can often be unsecured and unencrypted, leaving every user vulnerable to a cyber attack called man-in-the-middle (MITM). This specific attack is when hackers abuse a security flaw in the Wi-Fi network and intercept personal data.

This flaw then enables cybercriminals to access any information that passes between the websites you visit and your device. It gives them open access to your history, browsing activities, and even logins and purchase transactions. This then puts your sensitive information, including financial data and passwords, in the spotlight for identity theft.

Using free public Wi-Fi can also put you at risk of accidentally connecting to a fraudulent hotspotThese connections are usually disguised with names similar to legitimate public Wi-Fi’s that hackers have set up to attract people into connecting to the network. If you unknowingly connect to one of these rogue hotspots, the host of the network can then intercept your data and use hacking tools to implant malware into the devices connected, leaving your sensitive information exposed.

Dumpster Diving

If you are absent-mindedly disposing of your trash, including old mail that could have sensitive information written on it, you are unknowingly making yourself vulnerable to becoming a victim of identity theft.

Dumpster-diving identity thieves have no trouble when it comes to sifting through your trash if they know identifiable personal information can be found. It’s one of the most common ways of succumbing to identity theft without being aware of it, as the majority of people wouldn’t expect anyone would want to rummage through their discarded items.

With this in mind, before you hastily throw out old letters, receipts, and other items that may have your personal details written on them, it is imperative that you shred every last piece using a cross-cut shredder to ensure you leave no trace for identity thieves.

Dispose of everything separately and at different times after shredding the sensitive information. This makes it almost impossible for identity thieves to piece details, including card numbers together, even if they are shredded.

Mail Theft

Another easy way for thieves to access your information without you knowing is mail theft. If your mailbox is not secure, identity thieves can easily swipe your mail, giving them easy access to your sensitive information.

If your mailbox is unsecured and left unattended with bank and credit card statements, and even tax forms inside, thieves can easily grab them and gain access to your Social Security Number (SSN), one of the main pieces of information needed for a successful case of identity theft.

To avoid this easy mistake, you should ensure that your mailbox is 100% secure and not in disrepair. This way, no one can breach your security and access your private mail, significantly reducing your risk of identity theft.

If you are going away for a few days, contact the post office and have your mail stopped or arrange for a friend or neighbor to pick up your mail.

Find out more on how you can better protect yourself from these attacks on IDNotify Review.

Who Can You Call if You’ve Become a Victim of Identity Theft?

Between 2008 and 2020, there were over 12,000 reported data breaches in the United States, with over 11 billion records stolen. Stolen personal data can be used to commit fraud, resulting in significant monetary loss and crime. The key to recovery after identity theft is to act fast.

Contact Your Financial Institution

One of the biggest risks of identity fraud is that the criminal gets a hold of banking information. With the right personal identifying information, money can be taken from your bank account in a matter of seconds. For this reason, it is generally advised to contact your financial institution to freeze credit lines and cancel any cards related to your account.

Most credit card providers offer a zero-liability policy in the event of identity theft, protecting you from incurring large expenses. However, debit cards generally don’t have as strong protection. While fraudulent transactions made after identity theft has taken place are generally covered, any losses before that point may not be.

Create a Fraud Alert

Even if it is no fault of your own, fraud can negatively affect your credit score. It’s vital to take action to minimize the damage caused. Creating a fraud alert is the first step in the process. This signifies to the major credit reporting agencies that you’ve been a victim of identity theft.

Fraud alerts are free of charge and are registered on your credit report for up to a year after the alert is created. When your credit report is on fraud alert, institutions put measures in place to make it difficult for criminals to open new accounts in your name.

Even if you’re unsure whether you’ve been a victim of identity theft, it is a good idea to create a fraud alert until you get further information. Fraud alerts can be extended for up to 7 years, but this requires a Federal Trade Commission Identity Theft Report.

Monitor your Credit Reports

If you create a fraud alert on a credit file, you’re automatically entitled to access a free credit report from all primary credit agencies: Equifax, Experian, and TransUnion. It’s crucial to inspect these reports in search of irregularities or payments that you don’t recognize. Most credit bureaus have specialized employees to help in emergencies. Enquire which agency has an identity theft hotline and call this number immediately in the event of an issue.

It can be difficult to spot irregularities in a credit report, particularly if it contains numerous transactions. Important things to look out for include employees or employers you don’t recognize, overseas transactions, unfamiliar accounts, and unknown personal information.

Credit reports are often the first indication you’ve been a victim of identity theft. It is generally good practice to monitor your credit reports regularly, whether or not you suspect identity theft has occurred.

To determine which agency has an identity theft hotline, visit each of their websites.

Read More: Dangers of Posting Pictures and Information Online

Call the Police

Identity theft isn’t quite the same as regular theft or burglary. Although it is a serious crime, the process of tracking down the culprit, proving their guilt, and punishing them is far more complicated than with regular crimes. As identity theft often involves advanced technologies, police officers typically aren’t trained to handle such offenses.

Although it may be instinctual to report identity theft to the police, in most cases, this isn’t likely to help. However, in some instances, calling the police is an important factor. For example, if your bank account has been accessed by an unauthorized individual and the bank requires proof, you may need to provide an official police report before they’re entitled to investigate the issue.

Identity theft doesn’t just occur online. Other types of identity theft include mail identity theft, lost or stolen credit card identity theft, lost or stolen passport identity theft, or driver’s license identity theft. Other than a data breach revealing this information to a criminal, these types of identity theft occur when the criminal physically intercepts documents. Whether they steal or find a misplaced card or document, these culprits can be physically tracked. The police can be very effective in finding criminals who commit such forms of fraud.

While it’s rarely a disadvantage to contact the police regarding identity theft, it’s generally not a good idea to rely solely on them to recover your identity as they typically don’t have the resources.

Contact the Federal Trade Commission

If you’ve become a victim of identity theft, one of the most valuable resources is the Federal Trade Commission (FTC). The FTC offers support services to help people put recovery plans in place. In addition to a recovery plan, the FTC creates identity theft reports that act as proof that your identity was stolen.

To process an identity theft, the FTC operates with a 3 step plan. The first step involves freezing your credit lines and changing your passwords to minimize the risk of further fraud. The second step is creating a fraud alert and accessing your credit report. The third step is where you provide all relevant details to create an identity theft report.

At this point, you’re in a position to start recovering from the theft.

Get in Touch With Utility Companies

Identity thieves may try to target you through your utility providers. As soon as you realize your identity has been stolen, you must get in touch with utility companies to prevent new accounts from being opened in your name. They should have protocols in place to deal with such circumstances, preventing fraud from occurring.

To help you decide which ID theft protection to choose, read this detailed comparison on Lifelock and Identity Guard.

Do The Monitoring Services Work?

The answer to do ID theft monitoring services work is complicated.  While monitoring cannot prevent or protect you from identity theft, it can provide quick notice so you can address it sooner rather than later. However, most monitoring services do not include tax, government benefits, or social security fraud alerts as they do not have access to those databases.

While you can monitor your credit yourself, scheduling timely checks of your credit report with all three bureaus, you won’t have access to certain databases that can tell of potential identity theft, such as the National Change of Address database and dark websites where the on-going trade of stolen information occurs.

What are the Alternatives?

The best alternative to hiring a company is to do as much as you can yourself. You must be diligent, however, as it will take time and commitment. Here’s what you can do for yourself:

  • Monitor changes to your credit reports with the three credit bureaus – Experian, TransUnion, and Equifax.
  • Track credit scores, now a free option with many credit card issuers and personal financial websites.
  • Report any instances of identity theft you discover to the Federal Trade Commission (FTC) using the IdentityTheft.gov website or by calling them directly.
  • Contact credit bureaus and place a temporary fraud alert on your files.
  • Follow a free recovery path provided on the FTC website free of charge.

One additional important factor to consider is a credit freeze. You can do this yourself with the credit bureaus at no charge and no harm to your credit score. While this is in place, no one can open a new line of credit under your name and social security number. This helps you monitor your credit more closely and with less effort. When you’re ready, contact the credit bureaus and remove the freeze at any time.

If the do-it-yourself approach seems too overwhelming to you, however, consider going with an ID theft monitoring service to ensure you get the assistance you need. Once you’ve worked with them for a while, ask yourself, do ID theft monitoring services really work for your situation, and decide where to go from there. You can always start with paid services then segue into self-monitoring.

Conclusion

These days, almost all transactions are done online, from shopping to banking. As a result, personal information can be stolen, credit ruined, data breaches occur, and you can end up owing thousands of dollars you never spent. Monitoring your credit reports and identity is imperative going forward, and you have several options of how to go about it effectively.

Their services can work for you if you cannot monitor your credit yourself or have previously been the victim of identity fraud. The main thing to keep in mind is that these companies cannot keep your identity from being stolen. They can only monitor it and alert you to abnormalities after they happen. From there, you’ll need to take action on your own behalf.

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