Consumer Reports: Save Your Money On ID Theft Protection
PITTSBURGH (KDKA) - The fear of someone stealing your financial information and going on a shopping spree has helped drive sales of identity theft protection services.
Americans now spend an estimated $3.5 billion a year on these services.
However, Consumer Reports is advising consumers to save their money.
Lauren Mirsky considers herself lucky.
Thieves tried to use her credit card on two different occasions, but each time they were thwarted.
"The first time it happened, the credit-card company called me when they thought there was suspicious activity on the card. The second time, it was actually an airline that called me when they thought someone was purchasing a ticket using my card," Mirsky said.
Mirsky was among the eight million people who fell victim to identity theft in 2010.
Plenty of financial institutions are now marketing identity theft protection services to people just like Mirsky.
However, Consumer Reports Money Adviser said the rate of identity theft is actually declining.
"We found the companies often overstate the risk and puff up the power of their services," Greg Daugherty from Consumer Reports said.
The companies promise to alert you to suspicious activity with services like "Daily Credit Monitoring" and "Protecting Personal Information," including your Social Security Number.
Consumer Reports Money Adviser is debunking identity theft hype after looking at nearly two dozen plans that cost anywhere from $120 to $300 a year.
"It turns out you can do much of this monitoring yourself for little or no cost," Daugherty said.
Start by getting your credit report free, once a year, from each of the three major reporting agencies – Experian, Equifax and Transunion.
Look all of them over for anything suspicious.
"Next, put a security freeze on your file with the same credit agencies. That blocks access to your credit report and makes it more difficult for a crook to get new credit in your name," Daugherty said.
As for Mirsky, thieves were stopped thanks to safeguards financial institutions have in place that are required by law, which is another reason Consumer Reports said you can skip identity theft protection.
Among the other recommendations from Consumer Reports were to sign up for free alerts from your card issuer.
These red flag "higher-than-usual" charges on your accounts.
Also, routinely check your credit-card statements for unauthorized purchases.
For more information visit Consumer Reports' website.
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