Identity Theft Protection – Or Not

It has been a crazy two days for me, I was an MC at a CyberSecurity conference and have been running around like a chicken with my head cut off.  One of the questions that came up for our panel of experts related to the validity of identity theft “protection” services. While the question wasn’t really on topic it certainly caught my attention as a personal finance blogger.

I really think someone should come around and slap these people for being so bold as to put the word protection anywhere near their logo. What they should really call themselves is personal assistants with an insurance policy rider.  They do not protect you from becoming a victim of identity theft, they really just monitor your credit to determine if you may be a victim.

At the point these services take any sort of action someone has already assumed your identity and is working to take out lines of credit in your name. They have just identified a theft that has already occurred and are working to mitigate that risk. Any credit monitoring service will notify you of inquiries or changes to your credit reports, their service(s) notify them so they can notify you.

Looking through the list of other services included with one of the majorly popular identity theft protection services I actually break out laughing.

  • Wallet Protection – The service I am not naming, actually lists as a feature that they will personally handle getting your contents of your wallet reissued if you lose your wallet. All this really means is someone else will call and ask your bank to issue you a new ATM card, or call your credit card company to get a new CC.
  • Junk Mail/Card Offer Reduction – It is crazy easy to stop getting credit card offers in the mail. You can do this for free, in less than ten minutes on your own. There is absolutely no reason you should consider this a feature of anything.
  • Free Annual Credit Reports – Again, you are paying someone for something that is easy to do, and free. All you have to do is go to one website to pull your three free annual credit reports. Calling this a service is just a giant crock of ….. turkey butts.

But Kyle they say they are going to pay me $1,000,000.00 if my identity gets compromised. RTFP, they say they will pay up to $1,000,000.00 to help FIX the identity theft if was the result of a failure in their service. I don’t know how anything could be a failure in their service since they don’t prevent the fraud, they just detect it early on.

What you really end up getting is a dedicated “assistant” who takes your money and monitors your credit. If something changes they give you a buzz. They also help you do things that are dead simple, and free, for a fee. The only real value is in the money and you only get what it costs to fix the problem, not a real value to you.

Now I know I will get a couple of comments from people telling me the $120 a year or whatever is worth not having the hassle of calling around or dealing with credit bureaus on your own.  I say it is a waste of money. What do you think?


1 Dustin @ Inzolo October 23, 2009 at 1:18 am

I have identity theft insurance. I pay 12.50 per month for my family (though Zander Insurance). I do this mainly because my wife freaks out about it. I know that I’m not liable for any charges if my identity is stolen. I pay for the insurance because in the event that it is stolen, heaven forbit, I don’t want to spend hours upon hours on the phone clearing my good name – or my spouse, or one of my children. It fits in our budget and to me, it is worth it. My time is my most valuable asset.

2 Dan October 23, 2009 at 8:50 pm

I had insurance as well, and they told me it was my own fault due to neglegence. How fair is that??

3 Kyle October 24, 2009 at 11:35 pm

I think that was the fine print caveat you really have to look out for. The service in question will only pay up if the theft occured as a result of a failure in their process. If you plastered your SSN# on the side of a truck, they probably will leave you high and dry.

4 LeanLifeCoach November 6, 2009 at 2:39 pm

I’m provided LifeLock by my company due to security breach of our insurer.

I also have a policy with Zander.

My understanding with LifeLock, their service is only applicable if your identity was stolen because of a “failure of their service.”

Zander (I think it’s really IDExperts) pays to help you fix things regardless. Disclaimer:I’m sure if you “platered your SSN#” they may have an out as well.

5 Dallas Shredding July 5, 2010 at 12:22 am

It may be true that many people carelessly share too much of their private information on the Internet but majority of identity theft and other kinds of fraud are being done with the use of stolen mail, IDs and personal documents. Shredding copies of your personal effects is one way to avoid others from ever accessing them. No wonder that fraud is the top most committed crime in the country and its number will continue to rise if we do not come up with our own means of combating it.

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