Why You Shouldn’t Buy Identity Theft Protection?
Technology runs a majority of our lives nowadays. In metropolitan areas, public and private services have various techniques, including the Internet, in their backbones. These services often require your personal information. Your credit information, name, address, and even your social security are in different databases across services that you use.
The amount of personal information that you put online makes you vulnerable to various threats. Malicious software, viruses, and other apps are just around the corner to collect information from you. Criminals can use it in nefarious ways. That is why identity theft is becoming a rapidly rising concern.
What is Identity Theft?
Identity theft is when an imposter obtains personal information to impersonate someone. Social Security information, driver's license numbers, and other information uniquely identify a person. Having this information at hand allows a criminal to take on that individual's identity.
There are several types of identity theft.
Financial Identity Theft
The main reason a criminal wants access to your information is for financial gain. Criminals can hack into your account to clean out your bank accounts. However, a more sinister goal is to use your information for various financial activities.
Criminals use this personal information to open bank accounts and apply for loans. Additionally, they can also ask for a false tax return with the Internal Revenue Service (IRS) using your Social Security Number. Moreover, they can use your credit card information to purchase items anywhere.
Child and Senior Identity Theft
Children and senior citizens don't often care so much about their financial and legal activities for obvious reasons. Children and some senior citizens do not have their income. Therefore, there is no need to be concern about information such as Social Security number.
Criminals can use their information for a long time without consequences. The lack of financial, legal, and other civic activities means the owner of the information will not be aware that their identities are in danger.
Medical Identity Theft
Most countries offer public and private medical insurance. Having these insurance plans entitle the members to receive various benefits. Stealing information such as health insurance member numbers allows criminals to apply for different medical services. They can even use it to collect benefits associated with illnesses or injuries.
How Criminals Steal Identities?
There are various ways criminals steals your information. The most significant data breaches happened in the last five years. The Yahoo data breach is currently the biggest one. In 2014, the company revealed that around three billion user accounts were affected. Hackers steal real names, email addresses, dates of birth, telephone numbers, and other security information.
A more current and more severe case was the Equifax data breach just last year. It compromised the information of 143 million consumers. The Equifax breach affected significantly fewer people than Yahoo's case. However, names, birth dates, addresses, Social Security Numbers, and drivers' licenses were exposed. Additionally, hackers also download 200,000 credit card information. Worse, the company only discovered the breach on July 29, but Equifax says it likely started around May.
However, there are more personal types of attacks. Criminals can target individuals and spend time collecting personal information.
Yes. You read that right. Criminals will go as far as dumpster diving to collect information. It is an old-fashioned method. You receive a lot of documents containing your data. Bills, credit card applications, and other documents often end up in the trash. Anyone who knows what to look for can easily steal your information.
Another classic way to steal information is shoulder surfing. It often happens in places where you fill out forms such as government offices, areas where you buy big-ticket items, or similar establishments. Anyone can quickly look over your shoulders. They can take note of valuable information. Some employees of the establishment may even steal your forms.
Phishing and Malware
It is the most common way to steal an identity. A lot of financial and related activities happen online. You may receive emails pretending to be your bank or credit card company. Often, the email will ask you to update your information or login credentials. It will then redirect you to a third-party website where they collect your information.
Additionally, cybercriminals can trick you into downloading malicious software. It runs in the background without you noticing anything. Malware, such as spyware or keyloggers, collects information as you use your computer. The criminals easily download Usernames, emails, passwords and other online information. Moreover, data is also vulnerable when you do online banking or online shopping.
What are Identity Theft Protection Services?
The National Association of Insurance and Commissioners reports that identity theft insurance costs anywhere from $5 up to $30 a month.
Their services include alerts for credit fraud and other questionable financial activities. Additionally, they also provide account and credit monitoring. Some can even repair your credit history in case someone steals your identity.
Various reimbursements are available. But, typically these just cover the expenses you will incur while restoring your identity and credit. However, a majority of victims don't typically face out-of-pocket expenses.
Why Not to Buy Identity Theft Protection?
A lot of customers think that identity protection and insurance protect you from identity theft. In essence, these companies do not prevent identity theft. No single entity can do that for you. You share information across a large number of services and institutions. The amount of information you share on social media alone is difficult to protect.
Identity theft insurance claims to cover damages and reimbursement in case of attacks. However, it is important to note that these services do not cover monetary loses. Identity insurance plans often do not include benefits in case of damages. It is different from a car and similar insurance where your plan covers damages and losses. It may consist of your expenses while recovering your identity and credit. However, they do not reimburse money stolen from your bank accounts.
It is essential to take a closer look at the services and benefits of identity theft protection plans. Most are available through other insurance and protection services. Moreover, you can protect yourself for free.
At its core, these services do not protect you from identity theft. The most they can do is alert you in case you are already a victim. They don't necessarily protect your credit as well. You still have to get in contact with your bank and other financial institutions.
In some cases, companies offering identity theft protection outsource their services. LA Times reports that LifeLock, a company providing such protection, actually uses services from Equifax. Additionally, you are handing out more personal information when you sign up for protection services.
More importantly, identity theft protection cannot prevent data breaches. Security lies in the institutions which handle your information. And identity theft protection cannot do anything about the carelessness of companies.
What Should you do Against Identity Theft?
You are mostly buying peace of mind when you are paying for identity theft protection. Most of the services are redundant. Meaning, these services are already offered by banks and other insurance plans. Here are a few things to do to protect yourself instead.
Criminals are not above dumpster diving as described above. Therefore, it is a good idea to ditch paper bills altogether. Companies and government offices often offer paperless billing depending on your location. It is also a great way to track your bills online easily.
Shred any bills or documents that you are going to throw away if you are not comfortable going paperless. It needs a little bit more attention. But, it is a small extra step to protect you from more significant damages.
Get a P.O. Box
It is not exactly free. But, getting a P.O. box is stronger protection against possible identity theft. The United States Postal Service offers secure and affordable P.O. box rates depending on your needs.
Having a P.O. box protects your home address information. Set your bills, documents, and even financial and legal documents to use your P.O. box address. It keeps your residential address confidential. Moreover, it reduces the risk of having documents easily accessible as P.O. boxes are located in secure facilities.
Also, it is harder to use your credit card to purchase big-value items if your P.O. box is in a different Zip Code. Such information is often required for expensive items.
Free Credit Reports
One proper detection of identity theft is through your credit reports. It is one of the services often offered by identity theft protection plans. However, if you are in the United States, you are entitled to annual free credit reports.
You can head over to annualcreditreport.com to easily request credit reports from Equifax, Experian, and TransUnion. Additionally, you can stagger the request every few months. This report makes it easier to spot anomalies in your credit.
Free Fraud Alerts
Banks and credit card companies are already monitoring your account for fraudulent activities. You can contact your representative to find out more about their services. You can set-up custom alerts so you can receive emails or texts whenever they detect anything questionable.
Additionally, the nonprofit Identity Theft Resource Center offers information and contacts on how to set-up alerts for your protection. Signing up for any one of the three major credit reporting agencies also gives you fraud alert services.
A credit freeze prevents your credit report or credit score from being assessed. That means, the information cannot be used to apply for loans, obtaining new credit cards, or opening accounts under your name. You are provided a PIN to "thaw" your account.
Tighten Online Account Security
You also have to tighten your security regarding online accounts. A lot of identity theft cases in the past years stem from phishing or other online attacks. It is essential to make sure that your online accounts, such as social media, shopping, and online banking are safe and secure.
Use Anti-Malware Protection
More importantly, install all-around anti-malware protection on your system. Malware collects data from your computer. Therefore, it is essential to protect your machine using software such as MalwareFox.
It protects you by removing existing malware that may be "spying" on you. Additionally, it protects you real-time by blocking potential attacks. It also keeps your browser clean where most phishing attacks happen. MalwareFox also protects you from unknown threats such as ransomware.
The decision whether to sign-up for identity protection services relies on your willingness to take extra steps to protect yourself. Most of the services are available for free. The additional effort you need to take might just be more effective than paying more for identity theft protection.