Do Identity Theft Products and Services Help Minimize Risk?

Many services available at no cost
Data breaches and loss of personal identifying information have spawned products and services to help consumers prevent or minimize the risk of identity theft. Some rights and protections you have under federal or state laws can help you protect your identity and recover from identity theft at no cost, but some people either prefer to pay a third party to perform these services or they are not aware that many of the services are available at no cost. Free Fraud Alerts A fraud alert is a signal placed in your credit report or credit file to warn potential creditors that they must use what the law calls "reasonable policies and procedures" to verify your identity before they issue credit in your name. Fraud alerts may be effective at stopping someone from opening new credit accounts in your name, but they may not prevent the misuse of your existing accounts. Under the federal Fair Credit Reporting Act (FCRA), you may be entitled to two kinds of free fraud alerts: initial and extended. Initial Alert: You may ask a consumer reporting company to place an initial fraud alert on your credit report if you suspect you have been, or are about to be, a victim of identity theft. This may be appropriate after your wallet or another source of personal information is lost or stolen. An initial fraud alert is good for 90 days, and can be renewed when appropriate. To place an initial fraud alert, call the toll-free fraud number of any one of the three national consumer reporting companies. The company you call is required to contact the other two; they, in turn, will place an alert on their versions of your report. Expect to receive a confirmation from each of the companies.
Equifax: 1-800-525-6285
Experian: 1-888-EXPERIAN (397-3742) TransUnion: 1-800-680-7289 When you place an initial fraud alert on your credit report, you’re entitled to order one free credit report from each of the consumer reporting companies; if you ask, only the last four digits of your Social Security number will appear on your reports. Extended Alert: If you have been a victim of identity theft, you may ask for an extended alert, which stays on your credit report for seven years. To get an extended fraud alert placed on your report, you will need to contact one of the credit bureaus, and provide an Identity Theft Report, such as a police report or other report to a law enforcement agency, including a report to the FTC. If your credit report has an extended alert, potential creditors must contact you in person, or by phone or some other method you have provided before they can issue credit in your name. When you place an extended alert on your credit report, you’re entitled to two free credit reports from each of the consumer reporting companies within 12 months. In addition, the consumer reporting companies must remove your name from marketing lists for pre-screened offers of credit for five years. Credit Freezes If you place a freeze on your report, potential creditors and certain other people or businesses can’t get access to it unless you lift the freeze temporarily or permanently. Limiting access to your credit report makes it more difficult for identity thieves to open new accounts in your name. Most creditors will need to view a credit file before opening a new account; if they can’t see the file, they may not extend the credit. A credit freeze is different from a fraud alert in a number of ways. A freeze generally stops all access to your credit report, while a fraud alert permits creditors to get your report as long as they take steps to verify your identity. The availability of a credit freeze depends on state law or a consumer reporting company’s policies; fraud alerts are federal rights intended for consumers who believe they may have been, or actually have been, victims of identity theft. Some states charge a fee for placing or removing a freeze, although it is free to place or remove a fraud alert. The cost and lead times to lift or remove a freeze vary, so it’s wise to check with your state authorities or with a consumer reporting company in advance if possible. Free Credit Reports
Federal law gives every consumer the right to one free credit report from each nationwide consumer reporting company every 12 months. Requesting a report from a different company every few months can help you monitor activity on your credit reports. For more information, or to request your free credit reports, visit www.annualcreditreport.com. Identity Theft Protection Products and Services for Sale Identity theft protection companies offer a range of products and services for sale. Often, the companies advertising these services simply are offering to place a fraud alert or credit freeze on your report as described above. Under the law, initial fraud alerts and renewals are available for free if you have reason to believe you have been or are about to be a victim of identity theft. Some companies, including consumer reporting companies, offer subscriptions to credit monitoring services. These services track your credit report, and generally send you an email alert reflecting recent activity, such as an inquiry or new account. Some companies offer services to help you rebuild your identity in the event of identity theft. Typically, these services operate by obtaining a limited power of attorney from you, which enables the company to act on your behalf when dealing with consumer reporting companies, creditors, or other information sources. Additional services include removing your name from mailing lists or pre-screened offers of credit or insurance, representing your legal interests, "guaranteeing" reimbursement in the event you experience a loss due to identity theft, or helping you track down whether your personal information has been exposed online. Before you agree to pay for any of these services, read the fine print. Some of these services are available at no cost: for example, pre-screened offers of credit and insurance can be stopped for five years or permanently by calling toll-free 1-888-5-OPTOUT (1-888-567-8688) or visiting www.optoutprescreen.com