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ID theft

All about how it happens and how you can keep it from happening to you.

ID theft protection: Are you really getting what you pay for?

Identity theft has become a national problem, with more than 10 million victims in the United States in the past year. The proposed solution is identity theft protection or credit monitoring, but how do you now if you should purchase identity theft protection?

Identity theft protection plans claim to protect you from the costs associated with identity theft and the process of cleaning up afterward. Credit monitoring reviews your credit report at each of the three credit bureaus and notifies you of any changes that might indicate a problem.

But should you purchase this type of protection?

Consumer experts say most people don’t need identity theft protection. Why? Because it doesn’t reimburse you for the money that is stolen from you, although some will pay expenses like lost wages and legal fees. But even if they promise to cover some of the costs, the burden of dealing with creditors still falls on you, because creditors don’t want to deal with anyone else.

As an alternative to spending your money on ID theft protection, take steps to prevent becoming a victim. Protect your Social Security number, and pay your bills online instead of having them mailed to you. But be sure to use a secure site to do so.

Shred documents that contain your personal information, and opt out of credit card offers. You should also be sure to order copies of your credit report from all three bureaus and review them carefully. You can place a free 90-day alert with any of the bureaus if you suspect there’s a problem. This will require lenders to contact you before granting credit in your name.

Your homeowners insurance policy may already cover you for identity theft protection. Review your policy to find out.

If you do decide to purchase identity theft protection or sign up with a credit monitoring service, be sure you know exactly what you’re getting for your money. Ask yourself: Is it worth it or is it just providing a false sense of security?

Author's Choice: We highly recommend the identity theft protection service, LifeLock.

Published Mar 29 2011, 10:57 AM by IdentityTheft
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