Banks all over the country are beginning to push sales of identity theft services, but the question is this: Can you get the same level of protection you’d get with a company that specializes in identity theft protection?
Many banks are ramping up their marketing of protection packages through pop-up and banner ads on banking Web sites, and through customer service pitches in branches, as well as on the phone or in the mail. Pricing is similar to what is being charged by identity theft protection services. Some banks are offering a promotional rate of $1 for the first month, then the regular rate afterward.
The services provide daily credit monitoring, and promise to send alerts about new accounts being opened by someone else in a customer’s name. They also give customers access to their credit reports. Banks are offering the service to fill revenue gaps left by the absence of overdraft and interchange fees, and other traditional sources of income.
The banks are pitching these services, which are mostly unregulated, to their existing customer base. In fact, there are reports that some people have even been signed up automatically when they opened a new account. They were unaware of the service until they noticed charges on their statements.
But the fact is that most of these services only offer credit monitoring, which tracks credit reports for changes indicative of fraud, like an address change or new credit card application, and then alerts the customer. Some go a step further by monitoring online chat rooms where data thieves sell information, which represents a very small percentage of identity thefts overall.
Another fact is that the banks don’t provide the service themselves – they partner with other firms that do the actual monitoring. Many of these firms have numerous complaints registered against them and poor grades with the Better Business Bureau, as well as lawsuits from state attorneys general.
Although you may have done business with your bank for years, you should be leery of this type of identity theft protection. While it may look good on the outside, you may find that you’re not getting any value for your dollar.
It's our opinion that this type of protection isn't something you should be paying for – not when you can do this much on your own for free. And being coerced into signing up for it is never a good thing. Fear tactics should never be employed to sell anything, particularly when it comes to finance or identity protection. People are already scared enough about the economy, its effect on them, and the growing problem of identity theft and what it could mean for their situation.
When it comes to identity theft protection, weigh the pros and cons, and figure out what will work best for you. It may be that you feel comfortable taking care of things yourself. It may be that you feel more comfortable signing up with a service to watch over your personal information. You may even decide to sign up with your bank.
Whatever the case…do something. Don't let your good name and credit go unprotected.