Free ID theft prevention
Protecting your identity is a great idea. Paying for that protection isn't.
It’s a nightmare scenario. Someone, somewhere is pretending to be you. Using your credit cards, bank accounts, even getting loans in your name. It happens every year to millions of Americans and costs the banking industry billions.
And even though your losses might be limited by the law --ultimately you're not responsible for money obtained by someone illegally forging your signature -- should you become a victim, your life and credit rating will suffer, perhaps for years.
Enter American entrepreneurial spirit. Because ID theft is so highly publicized and so frightening, a crop of companies now offer to help -- for a fee, of course. Pay them every month and they'll help protect your identity. One even ran commercials showing a moving billboard driving around with the CEO's Social Security number on it: That's how confident he was that nobody could steal your identity with their $10-a-month service.
But here's something the ads don't say: The technique many services use is something you can do yourself in less than five minutes absolutely free.
What many of these companies do to protect you is to simply put a fraud alert on your account. And all that entails is going to the Web site of Equifax or Experian and filling out a simple form. (You have to contact TransUnion via e-mail, letter or phone.) Once a fraud alert is on your credit files, anyone granting you credit is supposed to take extra steps to verify you're who you say you are.
Take a look at the form. It's no big deal to fill out. The fraud alert lasts 90 days. And the cost? Zip. And if you're afraid you won't remember to renew your fraud alert every three months, go to the Web site I mention in this TV news story: ShieldSafe. They'll remind you to renew your fraud alert via e-mail every 90 days for free.
Check out the news story. Then -- as Paul Harvey would say -- I'll tell you the rest of the story.
Here's what you didn't get to see in the news story: While researching this, I talked to Mike Prusinski, vice president of corporate communications for LifeLock (the company that shows its CEO's Social Security number in its ads) and discovered they no longer use fraud alerts to protect you. Why? According to LifeLock, it's because they've developed new, proprietary computer algorithms that work better. But it also might have something to do with the fact that Experian got a permanent injunction that prohibits LifeLock from using blanket fraud alerts. (Read a press release about it here.)
Experian essentially argued that fraud alerts are meant to be placed by individuals who suspect their information may have been compromised, not by companies that sell protection.
The other thing I learned in talking to LifeLock is that their CEO's prominently displayed Social Security number has indeed been compromised at least once. According to Prusinski, a guy used it at a check-cashing store in Texas a couple of years ago.
I really get steamed at companies that use clever ads to sell services that you can do yourself for free. How about you?
Related reading at MoneyTalksNews:
- Free cell phones, free minutes
- Are credit card protection plans worth it?
- My new book: Life or Debt 2010
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