JB: Do these companies do any more that we, as consumers, can't do ourselves for free?
JD: Yes and no. Monitoring services will let you access your credit report frequently and send you alerts rather than you having to go and check the reports yourself. Some people believe that it's just as efficient to order on of your free credit reports (you're allowed one free credit report per credit reporting company per year) every 4 months so that you're constantly monitoring your credit. That would be free, but it still requires more effort and is only checking every few months.
For insurance, there are many things you can do to reduce your risk to the point that the money would be better spent in savings or investments.
JB: What about "Fraud Alerts"? Does this provide any comfort for a consumer worried about ID theft?
JD: To a degree. According to the FTC, with a fraud alert, "potential creditors must use what the law refers to as “reasonable policies and procedures” to verify your identity before issuing credit in your name". What constitutes reasonable can vary and, in my experience, retail stores aren't in a hurry to let a good sale go just because the buyer might be using stolen information.
JB: So rather than being aware of when someone steals our identity, how can we prevent it from happening in the first place when it comes to how and when we use credit and debit cards?
JD: Pay at the register in restaurants. This is to prevent "skimming", which is when a restaurant employee scans your card's information into a personal reader. This is much harder to do/impossible when you're standing right there the whole time watching.
Always cross out your card number on credit card sign slips. Many places only require a credit card number for a purchase. If your receipt contains your entire credit card number, you are making it easy for anyone who has access to that receipt to buy things with your card. Store employees, bookkeepers, anyone that goes through the company's trash, etc.
When shopping online, look for options to NOT store your number. There aren't many yet, but some stores provide an option to NOT store your credit card information in their system beyond the point at which your transaction is complete. Big stores like Amazon insist that storing your credit cards makes it easier for you to buy (and it does), but it also presents a security risk to you. If a given store doesn't have good security or if one of the employees feels like making some cash, the database storing the credit card numbers can be breached (a term I'm betting most people have heard about by now). Instead, if you can prevent the company from storing your credit card number in the first place, you're safe from breaches because they can't lose what they don't have.
Article comments
1 - Mark Davis
I understand how Jeremy can offer this advice since it's the same information that 98% of the folks out there think is Identity Theft, and really it's only about 26%, and only one of five areas of Identity Theft!
According to the FTC (Federal Trade Commission) there are five areas of Identity Theft - 1) DMV Identity Theft. This is where a person gets your ID and then gets a drivers license with their picture and your info on it. This can be done for under $30.00, from several website on the internet, and these are almost undetectable even by law enforcement because they have all of the holographic symbols and electronic strips. The ID thief then gets a ticket with you info and they don't show up for court, YOU now have a bench warrant out for your arrest, and you don't even know it until you are stopped for a simple traffic ticket, and you then find yourself face down on the hood of your car being arrested. 2) Social Security Identity Theft. There are nearly 40 MILLION Illegal emigrants in the US, who want jobs, and in order to get a job, they need a social security number, and they can purchase yours for under $50.00. They get a 1099 job with you social security number, and do you think that they are going to pay taxes on their income??? The IRS then sends you a letter demanding the taxes that their records show you owe. They then levy you paychecks and seize you bank account. I have lived through this nightmare, and then you have to prove that you’re you, and that your not the person that owes this money. 3) Medical Identity Theft. This is the fastest growing area of Identity Theft; this is where someone uses your insurance information to have medical procedures done in your name. A friend of mine was affected by this in the following way. He had a person get an AIDS test done in his name, and it came back that the thief was HIV Positive, this information was then entered into my friends MIB (Medical Information Bureau) record. My friend was then in an accident and was taken to a hospital who refused to treat him because his records showed that he was HIV Positive!!! 4) Character/Criminal Identity Theft. I don't think that I need to convince you why a criminal would want to have your ID, especially if they were a pedophile. They are limited to where they can live. 5) Financial Identity Theft. This is the type that most people are aware of, this isn't were someone gets your credit card info, or your bank account info, it's where they open up new accounts that you are not aware of, and according to the FTC, if there are charges, you have 30 days to refute the charges, or you owe them!!! If you don't know about the account, how can you refute the charges???
Who are you going to call? CityBank? LifeLock? These companies don't cover all area of Identity Theft; they are only credit monitoring services. There is only ONE company out there that have licensed investigators who will COMPLETELY RESTORE your Identity, and that is Pre-Paid Legal Services, with the Identity Theft Shield!!!
I have been a victim of Identity Theft, I have tried several different programs out there, and have put Pre-Paid Legal membership to the test and have proved that they work, and all of the people that I work daily with who have also been victims.
2 - Jamison
What a great promotion for yourself (judging from your URL, you not only put pre-paid legal services to the test, but you administered the test yourself).
Borderline Spam Comment as laid out in the "Comment Policy", but in any case, thanks for the comment.
3 - Mike
That was great information by Jeremy Duffy, but he did only spell out part of the identity theft problem. Its a whole lot more than what he wrote.
And Jamison - I gained just as much insight into ID Theft in the previous comment as I did to your interview with Mr. Duffy. Thanks!
4 - Jamison
Yes, ID Theft is a much larger problem than what Mr. Duffy talked about, but he is an awareness advocate to mostly people who have no clue about this sort of stuff. His target audience would be that group of people who see an email from their "bank" that starts out with "Dear bank member" and think it really is from their bank.
People like me and him know that ID theft and other scams can run much more deeply than discusses here, but I know as well as he does (Since I work at a school and encounter many parents and teachers with the same basic questions) that there is a need out there to teach people m any of the BASICS. And his awareness advocacy program does that.
Teach the clueless the basics, then move them up.
Thanks for the comment Mike, if Mark wants to promote his services and teach the masses a greater portion of ID Theft and it's dangers, anyone of us blogcritics writers (including myself) would be happy to conduct an interview with him. He will get more promotion that way than by commenting. We welcome your solicitations for an interview Mark.
5 - Jeremy Duffy
For those who bring up the point that I'm only covering a partial aspect of ID theft, you're right. I'm a computer and technology guy and focus on what I know. If I was aware of a simple answer to some of those other kinds of problems, I would promote it as as well, but the only thing I can currently recommend is to be as private with your information as possible to limit the spread and get a credit freeze to prevent people from getting credit in your name.
From what I see, while those other options are possible, they are far less likely and far easier to prove you weren't involved with than a simple fake credit account.
Other than that, pushing your state to pass strong data protection laws or a federal law outlawing data brokering would be a GREAT start.