Identity theft is a growing problem. Recent estimates put the number of victims in the US at 10 million and growing daily. And the number of companies offering identity theft insurance and credit monitoring is growing almost as fast as the number of victims!
Identity theft insurance claims to protect you from the costs associated with the theft of your identity as well as the frustrating and time consuming process of re-establishing yourself after someone has stolen your identity. Credit monitoring, which is related to identity theft insurance, checks your credit report with one of the major credit reporting agencies and notifies you of any changes such as new credit accounts that have been opened in your name or enquiries on your credit file. But is it something you really need?
What you need to bear in mind that many of these insurance policies and related services are being offered by the banks, credit card companies and other organisations that should be adequately protecting your personal details in the first place without the need for insurance!
Many consumer experts say that the majority of people don’t actually need identity theft protection. The main reason for this is that it doesn’t actually reimburse you for money that is stolen from you. Some policies will pay for legal fees (although generally a lawyer is not needed in identity theft cases) and lost wages, although salary payments are usually capped at around $500 a week. Some plans also state that they will cover the costs associated with resolving an identity theft case but as creditors normally won’t deal with anyone other than the account holder the likelihood is that you will have to deal with them yourself anyway!
There are many ways that you can minimise the risks of someone stealing your identity yourself. Using secure online payment methods rather than having bills sent out in the post, shredding or burning documents that contain personal details and opting out of receiving ‘junk mail’ such as unsolicited credit and store card offers, will all go a long way to reducing the chances of someone could steal mail and set up accounts without your knowledge. Also – check your home insurance policy as it may actually provide cover for identity theft.
If you do decide to invest in identity theft or credit monitoring services, make sure you know exactly what you are getting for your money.