Identity theft can happen to anyone, and it pays to take steps to protect your personal and financial information. This comprehensive guide will walk through all the key things you need to know about identity theft, credit monitoring, and identity protection services.
What is Identity Theft and How Common is it?
Identity theft occurs when someone steals your personal identifying information and uses it to commit fraud. This may include things like your:
- Full legal name
- Social Security number
- Date of birth
- Driver‘s license number
- Credit card or financial account numbers
With this sensitive information, identity thieves can pretend to be you and carry out all kinds of crimes like taking over your existing accounts or opening new credit cards and loans in your name.
According to 2021 data from the Federal Trade Commission, identity theft reports reached 1.4 million last year. And those are only the reported cases – the real total including unreported identity theft is estimated to be much higher.
One study from Javelin Strategy found that around 15 million Americans were victims of identity theft in 2020 alone, causing over $56 billion in total damages.
So how likely are you to become an identity theft victim? Unfortunately, your odds aren‘t low. Javelin Strategy found that about 1 in every 33 Americans will experience identity theft this year.
With fraud on the rise, protecting your personal data is more important than ever.
Common Identity Theft Scams to Watch Out For
Identity thieves use clever and varied strategies to get your information. Here are some of the most common identity theft scams to be aware of:
Phishing Emails and Texts
Phishing scams use fake emails or texts pretending to be from a trusted source like your bank, credit card company, or a government agency. They may claim there is a problem with your account and urge you to click a link to verify your details. The link goes to a fake site that collects your login info.
An identity thief may call claiming to be from the Social Security Administration or IRS and say your SSN is connected to criminal activity. They‘ll ask you to verify your full SSN and personal details. Any call asking for your SSN is almost certainly a scam.
Scam websites may mimic real login screens from banks and credit card companies to trick you into entering your username and password. They look convincing, but they steal your credentials.
Thieves may attach a skimming device on ATMs or gas pumps to quickly copy your debit card number. They can then create a fake card and drain your bank account.
Dishonest employees at medical offices, banks, or anywhere with access to sensitive records may steal customer information and sell it to identity thieves.
Thieves search through your trash looking for discarded documents containing personal identifying details and account numbers they can use to commit identity fraud.
When companies that have your personal data like credit bureaus, retailers, or medical providers get hacked, your info may end up for sale on the dark web.
Impacts of Identity Theft You Need to Know
If you become an identity theft victim, some potential consequences you may face include:
Financial Losses – From fraudulent credit accounts, charges, loans, tax filings, benefits claims and more in your name.
Credit Damage – New inquiries, accounts, and unpaid debts can tank your credit score by 100 points or more.
Criminal Implications – Identity thieves may use your name when arrested, leaving you to deal with false criminal or arrest records.
Lost Time and Effort – Hours of your personal time may be spent filing police reports, contacting creditors, repairing your credit, and restoring your identity.
Difficulty Getting Approved – With bad credit from identity theft, you may have problems getting approved for credit, utilities, rentals, loans, insurance policies, or jobs.
Legal Issues – You may need to work with law enforcement, file lawsuits, or go to court over identity theft disputes.
Stolen Benefits – Scammers may file for unemployment, medical coverage, tax refunds, or other government benefits using your SSN and cost you those payments.
A 2022 Identity Fraud Study from Javelin Strategy found that it takes identity theft victims an average of 23 hours to resolve cases of fraud, with 10% spending over 200 hours. And keep in mind – you may not find out you‘re an identity theft victim for months or even years after the fraud occurs.
Monitoring Your Credit Reports and Accounts
To catch identity theft quickly, it‘s essential to monitor your credit reports and accounts diligently.
You‘re entitled to a free credit report from each of the three major credit bureaus – Equifax, Experian, and TransUnion – every 12 months. Get your reports from AnnualCreditReport.com and review them at least once per year.
- New accounts or credit cards you don‘t recognize
- Hard credit inquiries you didn‘t authorize
- Incorrect personal details like an address where you never lived
In addition to your credit reports, closely monitor your financial and benefits accounts by reviewing monthly statements and online account activity.
- Purchases, withdrawals, or transfers you don‘t recognize
- Bills or statements that don‘t arrive when expected
- Unauthorized address changes with the post office or your creditors
Being vigilant about reviewing your credit reports and financial statements regularly is the top way to catch identity theft red flags early. The sooner you spot and report fraudulent activity, the less damage identity thieves can do.
12 Expert Identity Theft Prevention Tips
While you can never completely prevent identity theft, following these tips can help lower your risks:
Secure Documents and Information
- Shred any papers containing personal data before disposal using a cross-cut shredder
- Keep sensitive documents like your Social Security card locked up at home
- Never carry your Social Security card in your wallet or purse
Practice Safe Digital Habits
- Use unique complex passwords on all accounts and enable two-factor authentication when possible
- Avoid clicking links or downloading attachments in emails and texts from unknown senders
- Be cautious when entering payment information online – look for the lock icon indicating the checkout is secure
- Be selective about posting personal details like your phone number publicly on social media
- Never share sensitive information like your full birthdate, SSN, or home address online
Keep Devices and Accounts Secure
- Password protect all your devices and lock them when not in use
- Log out fully after using public computers
- Install anti-virus software and keep apps, operating systems, and browsers updated
Watch Out For Suspicious Activity
- Beware of phone calls or emails requesting personal information or money transfers
- Do not carry around extra debit cards, Social Security cards, passports, or other people‘s IDs
- Alert your bank immediately if you notice odd transactions or problems accessing your accounts
Check Your Credit Report Annually
- Taking advantage of your free annual credit reports helps you catch fraud early
- Consider signing up for credit monitoring that regularly checks your credit reports and scores
Freeze Your Credit If Needed
- Placing a credit freeze restricts access to your credit reports, making it harder for thieves to open new accounts
- Freezing your credit is free and you can lift it temporarily when applying for credit
Enroll In Identity Theft Protection
- Identity protection services monitor your credit and personal information and alert you about potential fraud
Know Where You Stand
- Do an annual self-audit to review your credit reports, account statements, debts, and membership benefits
- Make sure you know what credit cards, loans, leases, insurance policies, and benefits you have open
Update Information After Major Life Events
- Notify financial institutions about changes when you move, get married, divorced, or experience a death of someone close to you
- Find out about security practices before sharing personal information with businesses
- See if companies offer fraud monitoring in case of a breach
Talk To Your Employer about Identity Theft Safeguards
- Discuss steps your workplace takes to protect employee data and prevent company breaches
- Understand how your employer handles fraud events if employee information is compromised
What Identity Theft Protection Plans Offer
Identity protection services monitor your credit and personal information and send alerts about potential identity theft. There are many options, but features of the top identity theft plans include:
Dark Web Monitoring
Your email addresses, SSN, passwords, and other information are scanned on black market sites and criminal forums to check for compromised credentials.
Credit Report and Score Tracking
Services check your credit reports and scores regularly for hard inquiries, new accounts, score drops and other activity indicating fraud.
Credit and Debit Card Monitoring
Suspicious transactions with linked cards may be detected by monitoring merchant names, transaction amounts, and your typical spending geography and patterns.
Bank Account Monitoring
Unusual withdrawals, transfers, or balance changes trigger alerts to uncover potential bank account takeovers.
Credit Freezes and Fraud Alerts
Some companies help you quickly freeze credit reports to block new account openings or set extended fraud alerts at the credit bureaus.
Suspicious Web Monitoring
Identity thieves may create fake online profiles with your name and data or set up scam websites using your identity. Monitoring services search for these fake sites and social media accounts.
Sex Offender Registry Scans
Services scan registries to check that no sex offender crimes or registrations show up under your personal details.
Address Changes Monitoring
Alerts notify you if someone submits an unauthorized address change to the post office or your financial accounts without your permission.
401k and HSA Account Monitoring
Retirement and health accounts with personal information and assets can be monitored for balance changes and withdrawal activity indicating possible fraud.
Identity Restoration Services
If you do become an identity theft victim, restoration services provide expert help with documenting the fraud, contesting charges, repairing damaged credit, and filing paperwork to prove your innocence. This saves countless hours.
Comparing Top Identity Theft Protection Companies
With identity theft at record levels, using an identity protection service is wise. But with so many options, it can be hard to choose the right provider. Here‘s an overview of pricing and features at leading identity theft protection companies:
|Service||Starting Monthly Price||Key Features|
|LifeLock||$7.50 – $34.99||Credit monitoring; bank account alerts; dark web monitoring; stolen fund reimbursement up to $1 million|
|Identity Guard||$7.50 – $25||Dark web scans; credit score tracking; bank transaction monitoring; 401k/HSA alerts; identity theft insurance up to $1 million|
|ID Watchdog||$14.95 – $34.95||Credit reports; subprime loan monitoring; high-risk transaction alerts; personal VPN; identity theft insurance up to $1 million|
|Experian IdentityWorks||Free – $34.99||Dark web monitoring; credit reports and scores; SSN tracing and alerts; identity theft insurance up to $1 million|
*Prices as of June 2023
While prices and included features vary, any of these highly-rated services offer robust identity theft monitoring and protection. Evaluate factors like:
- Breadth of monitoring – credit, accounts, web, documents, etc.
- Insurance coverage amounts in case you become an identity theft victim
- Ability to monitor children‘s information
- Helpfulness of resolution services if your identity is stolen
- Types of alerts offered for suspicious activity
- Price and value based on your budget
To learn more about specific offerings, you can check out our full reviews:
Is Identity Theft Protection Worth the Cost?
With identity theft at all-time highs, using a monitoring and protection service makes sense for many consumers. However, it comes at a monthly or annual price, so is it really worth it?
According to identity theft experts, there are several key factors to consider when deciding if you should invest in an identity theft protection plan:
Your Personal Risk Profile
If you have a high volume of sensitive transactions, engage frequently on social media, do a lot of online shopping, or are extra concerned about fraud, a protection plan can be worthwhile. Those with low risk profiles can likely rely on free options only.
Plan Features That Bring You Peace of Mind
Think about specific monitoring features and additional protections that give you the most peace of mind based on your concerns – credit reports, bank alerts, web scans, insurance, etc. Evaluate whether a plan checks those boxes before paying.
Entry-level plans start around $7 per month. If budget is a concern, you can get solid monitoring for a low monthly price with one of the more basic plans. Extra features like identity restoration services come at a higher price.
Potential Time Savings
If you do become an unfortunate victim, identity theft resolution services save you time handling stacks of paperwork and calls to bureaus. But only pay for this if you value the convenience since it costs more.
Many plans include $1 million or more in identity theft insurance. This protects you from the costs of restoring your identity and covering related expenses if you experience fraud. For some, this insurance alone makes services worthwhile.
According to many financial experts, even a bare bones protection plan can provide value to consumers who want that extra peace of mind. But look closely at what‘s really included before signing up.
Common Questions about Identity Theft Protection
If you‘re considering identity theft monitoring and protection, here are answers to some frequently asked questions:
What‘s the difference between credit monitoring and identity theft protection?
Credit monitoring just tracks your credit reports and scores from the three major bureaus for signs of identity theft – new accounts, inquiries, late payments, etc.
Identity theft protection includes credit monitoring but also watches for fraudulent activity beyond your credit by monitoring bank accounts, retirement accounts, web activity, address changes, and more. Protection services offer broader oversight of both your credit profile and general identity.
Is identity theft protection worth it for someone with excellent credit?
Having excellent credit doesn‘t make you immune from identity theft. Thieves don‘t just target those with bad credit; they seek out any personal information they can exploit. Protection services scan the dark web where your info may be bought and sold regardless of your credit score. Monitoring helps catch fraud rapidly even if you have great credit.
Do banks provide identity theft protection?
Some banks offer limited identity theft protection to checking account holders, like monitoring your transactions for suspicious activity. But bank-provided protection is typically basic – only covering your account activity with that bank. Broader monitoring services track all your credit activity across all financial accounts, web activity, address records and more.
What is the best identity theft company?
Every leading identity theft protection company has strengths and weaknesses based on their specific monitoring features and restoration help. Brands like LifeLock, Identity Guard, ID Watchdog, and Experian IdentityWorks are all highly rated. Compare factors like price, types of monitoring, ease of use, and customer service to choose a service that aligns with your budget and needs.
How quickly does identity theft monitoring work?
The best identity theft protection services monitor your credit and identity information on a continuous basis rather than periodic sweeps. This enables fast alerts. You will typically be notified of any potential fraud via email, text, or mobile app within 24 hours or less of suspicious activity. Real-time monitoring means rapid notification.
Final Thoughts on Identity Theft Protection
After reading this comprehensive guide, you now understand the serious impacts identity theft can have and why proactive monitoring and protection are so important.
Start by checking your annual credit reports and regularly reviewing statements for suspicious transactions. Additionally, take preventative steps like securing documents, being cautious online, freezing your credit if needed, and limiting personal information shared.
An identity theft protection service provides an added layer of monitoring and alerts to give you peace of mind. Compare top providers like LifeLock and Identity Guard to choose a plan that fits your budget and needs.
Detecting identity theft early limits the headaches and financial damage thieves can inflict. With vigilance and the right protection plan, you can keep your identity secure and frustrations to a minimum even as fraud schemes grow more complex. Just stay informed on the latest threats, and take a proactive approach to defending your personal and financial data.