In part 1 of this article we discussed the growing threat of identity theft that has lead consumer advocates and ID theft experts to agree that consumers should consider identity protection services instead of only taking a do-it-yourself approach to identity theft risk management.
We discussed the first few important criteria to consider when evaluating identity protection services including price/value, restoration services, credit monitoring and Internet monitoring. We begin part 2 of this article by concluding the discussion on Internet monitoring, and then we introduce the other criteria to consider in an evaluation of an identity protection plan.
Internet monitoring (continued)
Whereas even tech savvy consumers would be challenged to find an entry point into the Deep Net, sophisticated investigative firms have the know how to monitor the Deep Web to match a consumer’s personal identifiers such as their Social Security number, bank and credit account numbers, and other identifiers with personal identifiers and credentials that are being sold or traded in the Internet’s dark and scary underbelly. There are tens of thousands of underground Websites and chatbrooms that must be monitored continuously. A match between a consumer’s identifiers and those being transacted on the Deep Web indicates flags identity theft. Upon receiving an alert from the identity protection service, a consumer can take immediate action to curb the damage, for example, by cancelling a credit card, alerting their bank of imminent fraud on their account, or by notifying the credit bureaus that they are a victim of identity theft.
Some ID protection services emphasize “existing bank account fraud” or bank account take over fraud. While Internet monitoring may catch your bank account number being traded as an early warning signal, there are some other built in banking protections and statistics that consumers should be aware of.
Unlike a Social Security number, a bank account number and related bank account security information is not widely available. For the most part, we control and protect our bank account number, login name and password. Banks are becoming more adept at protecting and securing our personal bank accounts. There are two reasons for this. There are federal regulations that mandate bank account security standards and there are federal laws that protect the money in consumer bank accounts (but not business bank accounts!). If a crook gains access to your bank account, the bank is obligated to replenish your money under the Electronic Fund Transfer Act. Additionally, state laws often hold the bank responsible for bank account fraud. Because of these laws protecting consumer bank accounts, the banks have an interest in minimizing fraud and losses.
In 2012 only 6.4% of all reported identity fraud was bank related, down 2.8% from the previous year. However, fraud on existing bank accounts made up less than 2% of all identity theft reports and decreased almost 14% over the prior year. It appears that identity theft related to existing bank accounts is declining.
If you are concerned more about bank account fraud than other types of identity theft, respond to these statements:
- Name everyone that you have shared your bank account number and security information with.
- Now name everyone that has your Social Security number on file.
Most people do not share their bank account number and security information with anyone, whereas, the thought of naming every person, employer, government agency and other organization that has recorded our Social Security number is overwhelming.
The monitoring of one’s credit card numbers and Social Security number may be significantly more important than our bank account as suggested by the 2012 identity theft statistics. Credit card fraud made up 13.4% of all identity fraud–up almost 25% over the prior year. New credit card, which is committed by applying for a credit card by using a stolen Social Security number, made of over half of all the credit card fraud, and new credit account fraud jumped almost 40% last year compared to 2011. Even the author became a victim of new credit account fraud during the last year. New credit card account fraud is increasing compared to existing bank account fraud.
Public records searches. There are millions of data bases and tens of billions of records in those databases that contain personal identifiers such as Social Security numbers. For example, if you have you ever purchased a home, your mortgage document may be available electronically as a single record in a public database in the county where you purchased the property. In some cases these public records are accessible online with your name, Social Security number and date of birth for anyone to view and snatch! This is all a thief needs to commit identity theft and to wreak havoc on your life.
If an identity thief conducts certain transactions with your Social Security number it too will be recorded in a public record. In either case, you would want to know where your Social Security number has been used by you or an identity thief. Then you may take immediate action if your Social Security number was found in those public records.
You may be able to request that your Social Security number be redacted from records identified in the search by contacting the database owner, for example, a county register of deeds. If your Social Security number shows up in some obscure database, it may be a clue that someone has used your identifiers, and you should take appropriate action.
Ask how many public records will be searched for your Social Security number? Some identity protection programs search through billions of online public records databases looking for the use of your Social Security number.
Business reputation and experience. There is an overarching criterion that should be evaluated when selecting an identity protection service. That is, what is the reputation and credibility of the company or companies providing the services? Identity protection services are fundamentally a type of financial service, an insurance that is meant to protect your assets and to save you time and money. The major players in the industry have a broad range of experience, history, reputation and financial strengths. Some are recent start-ups taking advantage of the market opportunity for identity protection services, while others have been around for decades providing investigate, fraud, and risk management services throughout the world. The most familiar name may not be the best overall and the least familiar may not be the worst. Be cautious of advertising that sounds like an endorsement.
Learn about the company and how long the firm been in business, and how long have they been in the business of providing identity protection and related services. It is important to have a sense of the financially stability of the company because you want them to be there when you or a family member becomes a victim of identity theft.
Making a buying decision merely on price, emotion, or an endorsement will provide some identity protection, but most often it will not provide you with the best protection or the best value.
Ancillary benefits. No two identity protection plans offer identical services, and all purport to offer something unique. Often the differences are minor or irrelevant and are included to appeal to consumer emotions. For example the subject of bank account fraud was discussed in a preceding paragraph as a “hot button” under the Internet monitoring heading of this article. Statistics suggest that type of fraud is declining while others are on the rise.
Some identity protection plans and homeowner’s protection offer identity theft insurance ranging from a few thousand dollars to up to a million dollars. Read the fine print. Reimbursement plans have set items that a victim can get reimbursed for ranging from lost work time to postage and copying fees. Obviously one must keep meticulous records to make the expense reimbursement claims, which more often than not amount to a few dollars in claims. And as with any insurance claims, they must be approved by the insurer.
Lost work time is limited, and it commonly does not apply to self-employed victims and personal financial losses (for example, money stolen from a bank account). The million dollar guarantees sound attractive, but they most often do not apply to claims. In other words, if a thief steals a million dollars from your retirement account, don’t expect a million dollar guarantee to replenish directly a millions dollars back into your account. Guarantees apply to how much the identity protection company will spend to help you restore you identity. When you read reimbursement policies and guarantees, pay particular attention to what is covered, what is excluded, and the limitations. Just because an item isn’t excluded, does not mean it is covered. In an insurance policy, the declarations state what risks are covered by the policy, and the exclusions state how the covered risks (declarations) may be limited and what is not covered under the policy.
An identity protection plan that provides a comprehensive restoration benefit, discussed previously, relegates insurance as unnecessary because with comprehensive restoration services someone else is going to be doing all the restoration work for the victim. That’s the benefit of full restoration.
Lost wallet assistance is provided with at a few different plans and may range from providing telephone advice to an identity protection advocate notifying credit card companies, the DMV, etc., that you lost your wallet. The best preventive step one can take to avoid the inconveniences of losing a wallet is to make a list of the contents of your wallet or lay out all the items in your wallet on a photocopy machine and make a photocopy (or take a picture) of them. If you lose your wallet you will have a record of everything that was lost or stolen and you know immediately what credit card companies to contact to report stolen cards. Another practical tip is to only carry one or two credit cards in your wallet, do not carry any identification that contains your Social Security number including your Social Security Card, Medicare Card, or other medical identity card that has your Social Security Number imprinted on it.
Sex offender searches or monitoring may or may not be an identity theft issue. The identity theft issue is whether or a not a sex offender is using your street address to report falsely his or her residence. This feature searches sex offender databases for your home address and reports any matches to you.
Regardless whether you choose an identity protection service or not, you should take every step possible that you can to prevent your identity from being compromised. In general protect your personal information especially your Social Security number and date of birth. Do not give out personal information indiscriminately to people you do not know. This identity theft column in ventwing.com provides many tips on how to prevent identity theft. Additional information on what you can do to minimize the risk of identity theft for you and your family can be found on the Federal Trade Commission’s Identity Theft Website.
Do you need advice and assistance in selection an identity protection plan? Contact the author by clicking on his name on the byline, through Facebook or by email and he will share his favorites with you.