Companies specializing in credit card fraud detection make some pretty big claims, but unless you read the fine print, it’s difficult to know what they actually do to protect your money and credit score. Identity theft is a real threat, but you want to know what you are getting into before you commit to anything. Just like you should make an effort to see what is in your food, you should do your homework and see what fraud protection companies are actually doing in the area of identity theft alert.
Credit Score Monitoring
The primary function of credit card fraud detection services is to monitor your credit score. When your identity is stolen, it isn’t just your money that is at stake -- it is your entire future. With bad credit, it can be nearly impossible to buy a new house or a car. Often, when an identity thief gets ahold of your credit card, they rack up charges on your account which you are unable to pay off. This has a negative effect on your credit score. So, credit card fraud detection services keep an eye on your credit report and alert you if any drastic changes occur. They will normally send you updates monthly about whether or not your credit score stays the same.
Secondly, identity theft prevention programs, like LifeLock®, help proactively protect your identity. If you choose a premium membership level, you can give these companies access to your bank accounts and credit card statements. They will not be able to take out any money, but they will be able to alert you* if they find suspicious activity. If any sizeable amount of money is moved from your bank account, you will be sent an alert by your protection agent. It is best to alert them before you make any large purchases so they don’t mistake your spending as identity theft. In seeing your bank information, they will also be able to spot a loan being taken out in your name.
Your bank account and credit cards aren’t the only ways for people to steal your identity. Credit card fraud protection companies will keep an eye on your personal information, such as your social security number activity, to make sure that no one is trying to pass themselves off as you. In this way, they are also able to track your driver’s license identification number and any change of address. Then, you can verify whether the suspicious behavior is fraudulent.
While there is no real way to prevent identity theft, there are steps that can be taken to become aware of it. That way, you are able to quickly take steps to reverse the process. This is precisely how credit card fraud prevention companies operate, looking out for you and your future. They are able to monitor your information and know when someone is trying to take advantage of your hard work.
*LifeLock does not monitor all transactions at all businesses.