Nine tips for consumers shopping for identity theft protection
But the Consumer Federation of America warns that many of these companies make false promises and exaggerated or misleading claims.
"Identity theft services may be able to help resolve your identity theft problems, but no service can absolutely prevent your personal information from being stolen," Susan Grant, the organization's director of consumer protection, said in a statement. "It's important for consumers to know what to steer clear of when purchasing identity theft services."
Identity theft remains the top complaint to the Federal Trade Commission. The Consumer Federation of America teamed up with its own ID Theft Services Best Practice Group to come up with a list of nine tips to help consumers navigate the plethora of services marketed to them. The group, which includes consumer organizations, consumer agencies and companies that provide identity theft services, also plans to come up with a list of best practices for identity theft service providers later this year.
Here are the tips:
- Steer clear of companies that claim to completely guard you against identity theft. As Grant pointed out, no company can protect you 100%t. A legitimate company won't claim that it does.
- Scare tactics should be another warning sign to avoid a company. Reputable identity theft providers won't try to scare the consumer or exaggerate the possibility of becoming the next victim of identity theft.
- Is it hard to find out information about the company on its website? If so, stay away. A good company will list basic information such as its name, its headquarter's physical location, its contact information and the contact information of its product distributor.
- Be wary of a company that offers to monitor your personal information and alert you if someone is fraudulently using it. You should first find out what exactly the company is going to monitor. It could be any of the three major credit card bureaus, commercial databases, public records or the Internet. That information should be easy to find on the website or from a customer service representative. Also, ask how frequently your information will be monitored.
- Find out how exactly monitoring or other services a company offers will actually help you. Avoid a company that doesn't make that clear. For example, the company should explain what type of information a credit report contains. You should also find out if you'll be alerted about suspicious activity and if so, how.
- A company should explain clearly how it will help identity theft victims if that is one of the services it offers. Find out who's eligible. Some services provide kits of information or one-on-one counseling. Others contact a customers' creditors.
- Do you know how much the identity protection service will cost you before you give out your payment information? A reputable company will fully disclose the cost of its program in advance.
- Does the company offer insurance or a guarantee? If so, what's covered or who's eligible? For example, if it covers expenses you incurred because of identity theft, then the company should explain what expenses are included. It should also explain how you can make a claim and if there are any limitations.