Identity theft is a very real and growing problem, full of terrifying statistics and strange cases. Knowing how to handle it can be difficult. And while identity theft protection companies are certainly an option to consider, they aren't necessarily for everyone. Here are some pros and cons.
Pros of ID Theft Protection
- They can do a lot of things you can't: It's possible that if you really devoted yourself to it, you could monitor your identity nearly as well as an identity theft protection bureau. You can check your own credit to a point for free, at all three bureaus, once a year, for instance. But other things would require you to become a bit paranoid, and still others -- like the monitoring of black market sites for your personal information -- are probably impossible for the average person. The companies that check for payday loans seem particularly helpful.
- They offer insurance: Most companies have either a hefty insurance policy or a service guarantee that they'll spend seven figures or more to help you. Considering how deep in the hole you can be after, for instance, year's worth of defaulted credit cards and fraudulent checks in your name, that insurance might just be worth it. Most people don't have that kind of money to spend trying to right the ship after a random terrible happenstance, and if you somehow do have that much money, do you really want to spend it on that?
- They give you peace of mind: The best identity theft protection companies combine the financial stability of insurance, the comfort of thorough research and protection, and the added benefit of educating you about how to protect yourself. When you add it all together, it can make a pretty big impact on your overall sense of mental and emotional well-being.
Cons of ID Theft Protection
- They don't always do what they say they will: Paying for insurance is always risky, depending on how trusting a person you are. The fact of the matter is that you're banking money into a company to pay for a hypothetical future service that A: You might not need, and B: they might not feel like providing. Especially in an industry as new as this one, where the landscape hasn't really settled in just yet. Sift through reviews of just about every service, and you can find people who were simply left out in the cold.
- Most have massive, glaring drawbacks: In the wake of a court case about false advertising, LifeLock had to pay a sizable settlement when the FTC determined that they didn't change their business practices enough. Experian was subject to a huge data breach. Identity Force has a reputation for partnering with 3rd-party service providers and then charging you extra for the work they did without your knowledge. Intelius is allegedly bad about post-transaction marketing. This sort of boils down to the same thing as the previous point -- this is more or less a frontier, in terms of businesses. You can compare features on a checklist all day, but at the end of the day, it helps to dig through reviews and see what people are actually saying and whether any common themes emerge.
- A lot of it is stuff you could do yourself: While you can't do everything related to data security, you can do some things. Lesser services that basically just run your credit a few times and check your SSN out online aren't worth a whole monthly fee. If you're going to go for the service, it makes the most sense to go for it at a tier that provides something meaningful.
