Javelin Strategy & Research’s 2017 Identify Fraud Study found that $16 billion was stolen from 15.4 million U.S. consumers in 2016. With all the news about hackers breaching the data centers of major corporations, including Equifax (where in 2017, private data of approximately 150 million Americans was stolen), you may wonder if it’s time to purchase an Identity Protection Service (IPS).
So what does an Identity Protection Service actually do, and is it worth the expense? Basically, after you sign up for an IPS, the service will monitor major consumer reporting agencies and then notify you if anything suspicious is found related to your identity or credit report. An IPS may also offer bank account monitoring, change of address monitoring, and/or court record monitoring for an additional fee. An IPS cannot protect you from identity theft; instead, it simply notifies you of potentially suspicious activity.
What are the odds that a hack of a major corporation will result in identity theft? Wikipedia reports, “A US Government Accountability Office study determined that ‘most breaches have not resulted in detected incidents of identity theft’.” The report also noted, however, that “the full extent is unknown.” A later unpublished study by Carnegie Mellon University noted that “Most often, the causes of identity theft is not known,” and further reported a conclusion that “the probability of becoming a victim to identity theft as a result of a data breach is … around only 2%”. More recently, an association of consumer data companies noted that a data breach of more than 4 million individuals’ records resulted in only about 1,800 instances of identity theft, according to the company whose systems were breached. By law, all corporations are required to notify victims of such a breach, and they are typically instructed to change their password or other security details.
How can you protect yourself? The three major consumer credit reporting agencies are Equifax, Experian, and TransUnion (known as the “Big Three”). Consumers are entitled to receive one free report each year from each of these three agencies, which they should request (and carefully review), and can also enable a credit freeze on their account. Regularly logging in and reviewing your bank or investment accounts lets you monitor for any unusual activity. Consumer Reports lists eight free steps you can take to protect your identity. And should you sign up for an Identity Protection Service? On the one hand, Malwarebytes Labs argues against it, stating “they don’t, at present, protect against the worst impacts of identity theft — the theft itself … they let the credit bureaus off the hook for improving their security.” On the other hand, although you can certainly do it yourself, many consumers feel that it’s not worth the effort involved without paying for a service. If you do opt to sign up with an Identity Protection Service, there are numerous choices available; Reviews.com offers its top suggestions.