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There Is No Such Thing As 'Identity Protection'
Identity protection is one of the hottest selling commodities right now. It's understandable too, with all the news about big name companies that are brought to their knees by a band of brash hackers. With most companies offering identity protection with credit monitoring, there's no reason not to invest in it, right?
There is no protection against hackers, at least not with today's sub standards in security. The big companies that got hit by hackers all lacked one thing: secure personal data. Target allowed an infected third party system into their mainframe willingly. Anthem Insurance, a company trusted with tons upon tons of customers' personal information, didn't encrypt one piece of data. As long as companies like this are allowed to do business the way they do, identity protection won't mean a thing. Especially the way the "protection" is set up.
First of all, let's stop calling it identity protection. No company that sells identity protection truly offers a service that defends you against identity theft before it happens. The identity protection offered in today's world is actually just identity monitoring. Meaning that in order for a company to "protect" you, your identity must first be attacked. Loans can still be opened in your name, credit cards can be applied for and ultimately granted, your social security number can be sold to someone in another country all before you log on to your computer to view your alert. For those that have identity protection and don't log on/check their account regularly or don't have the alerts sent to them through email and/or text, you're basically paying for a passive service that can't even alert you in real time when your identity may have been compromised.
There are ways to protect yourself from identity theft that are a bit more proactive, especially when paired with a good identity protection service. A fraud alert is something you place on your credit file that requires businesses that are looking to open up a new line of credit in your name to call you first for confirmation. You can put one of these on your credit by calling one of the three main credit bureaus (Experian, Equifax or TransUnion) and request a fraud alert be placed on your file. These will usually last up to 90 days. After that time has expired you will have to place a new fraud alert on your file.
Another proactive approach to identity protection is a credit/security freeze. These are pretty heavy duty in that they won't allow ANYONE to open up ANY new line of credit in your name while you have the freeze on your file. If you sign up for a credit/security freeze, you will be given a PIN number or password that you use to unfreeze your credit for a certain period of time. After that window closes your credit goes right back to being a credit-sicle. In order to place one of these freezes on your file you will have to call each of the main credit bureaus to place the freeze on your file. Depending on what state you live in these may cost money and sometimes require a police report to prove identity theft has already happened to you. But if you do place a freeze on your credit it will last until you remove it.
Both a fraud alert and a credit freeze can help stop identity theft before it happens, but be warned, as both methods still have their flaws. For some companies, a fraud alert can be bi-passed, and a credit freeze is great, but check your credit report before placing one on your file. If you have fraudulent accounts already under your name it will be a long and arduous task to remove them with a credit freeze on your file.
If you really want a proactive identity protection plan, try this:
- File your taxes as early as you can
- Never leave personal information (SSN, birth records, etc.) lying around
- Dispose of personal information properly (shredding or safely/properly burning)
- Never give out personal information to people you don't know/trust
- Don't give out your SSN on resumes without researching the company first
- Never keep personal info (SSN, passport, etc.) on your person unless needed
- Lock up your personal information at home in a locking drawer/cabinet
- Pay in cash when you can, especially around the holidays
Today, there is no proactive identity protection that you can buy on the market. The best way to protect yourself proactively is to be smart with your personal information and your online usage. You may not be able to control how others handle your personal information, but you can control who you give it out to.