Identity Theft Protection Services: Worth Having?

With the reports of the Equifax data breach that affected over 143 million customers, have you taken measures to ensure that your data is safe? While you could be careful about what information you share with trusted/untrusted sources, personal information like Social Security Number (SSN), credit card details etc. are more vulnerable than ever as major organizations are targeted by hackers.

Will signing up for an identity theft protection service save you from the time, expense and exasperation of cleaning up an identity thief’s mess?  You've probably been offered these services, but it's hard to know what's worth the cost. Do you really need an identity theft protection service? Here’s a look at what some of the best-known identity theft protection services offer, where they fall short and how much they cost.

Many identity theft protection services are available as freestanding services through a company that specializes in ID theft protection. TrustedID started out that way; it has since been purchased by Equifax, victim of the latest breach. The company is relying on TrustedID to help affected consumers. Here’s what it offers consumers.

Credit reports, credit scores and credit monitoring: TrustedID’s identity theft protection service monitors your credit daily with all three major credit bureaus. You’ll also get your Equifax 3-Bureau credit report and score. 

Threat evaluation and reduction: TrustedID scans public databases and black market Internet sides for fraudulent use of your SSN and credit card numbers. It's questionable how useful this information is since you can’t unexpose a compromised Social Security or account number.

The service also provides an Identity Threat Score to help you evaluate your risk of becoming an identity theft victim. The Identity Threat Score looks at how much of your information is publicly available – and where it’s available – to determine whether you are at low, moderate or high risk of identity theft. Based on your risk level, the service will recommend steps to reduce your risk. The service also tries to get your publicly available personal information removed from the Internet, though it can’t guarantee that the sites will honor removal requests or won’t reintroduce your information later.

TrustedID also checks your Facebook profile and privacy settings to determine if they put you at risk of ID theft. TrustedID also gets your name off junk mail and preapproved offer lists.

Insurance: TrustedID offers up to $1 million in coverage for out-of-pocket costs you could incur if your identity is stolen. 

Pricing: Pricing for the service is not visible on TrustedID's website, which seems to require signing up for a free account without offering any information about what you will pay when the account ends. A coupon site offered a 14-day free trial and individual plans starting at $10.42 per month.

Experian’s identity theft protection service, called IdentityWorks gives you online access to your Experian credit report and score. It monitors your Experian, Equifax and TransUnion credit reports and notifies you of potentially fraudulent activity such as new credit or loan accounts or new inquiries about your credit. There are two pricing plans, Experian IdentityWorks Plus and Experian IdentityWorks Premium with slightly more benefits to the latter.

Threat evaluation and reduction: The service combs the Dark Web for unauhtorized use of your SSN, debit and credit card numbers. In addition, the Premium plan offers Social Security Number Traces and Fianncial Account Takeover Alerts.

Resolution assistance: The service promises to connect you with fraud recovery professionals who can help you resolve an identity theft problem. The company says its professionals will contact the proper authorities and assist with the paperwork.

Insurance: Experian’s service also provides $1 million in identity theft insurance with no deductible. The insurance covers fraudulent electronic funds transfers, lost wages, legal defense and private investigator costs as well as your expenses related to paperwork and replacing identification.

Pricing: Experian IdentityWorks Plus offers a 30-day free trial followed by a $9.99 monthly fee. The price tag for the Premium service is $19.99 a month after a 30-day free trial.

LifeLock offers a variety of plans, tiered according to benefits and costs. The lowest rung is the Standard offering, followed by the Advantage plan and the Ultimate Plus plan.

Threat evaluation and reduction: All three plans offer SSN and Credit alerts, along with a privacy monitor that helps control the customer's personal information easily available on the web. The pricier plans also offer banking and credit card monitoring as well as data breach notifications. The Advantage plan offers credit report from one bureau, while the Ulitmate Plus plan serves reports from all three bureaus. The highest paid plan also monitors 401(k) and investment activities.

Resolution assistance: The service offers a dedicated restoration team for all plans.

Insurance: LifeLock offers stolen-amount reimbursement at the rate of $25,000 for the Standard plan, $100,000 for the Advantage plan and $1 million for the Ultimate Plus plan.

Pricing: As of September 8, 2017, the company is offering its Standard plan for $8.99 a month, plus tax; the Advantage plan for $17.99 plus tax; and the Ultimate Plus plan for $26.99 plus tax.

Other identity protection services include PrivacyGuard, IdentityGuard, IdentityForce, and Identity Shield

Most identity theft protection services offer similar levels of hand-holding through the identity theft prevention and recovery processes, but you can usually do most – if not all – of what they offer yourself for free. What’s more, the insurance is subject to numerous restrictions and limitations, most notably not kicking in at all until another policy you probably already have pays up. Perhaps the biggest problem with any identity theft protection service is that there’s no way to know how well it works unless you find out that your identity is stolen and you need to take advantage of the service’s recovery assistance and insurance.

So do you really need an identity theft protection service? According to the Bureau of Justice Statistics’ 2014 Crime Victimization Survey, which is – believe it or not – the most recent data available, only 14% of victims experienced a financial loss for which they were not reimbursed. Only 14% of that 14% group (about 2% of all the victims) lost $1,000 or more that was not reimbursed. It's unclear whether (or how much) these figures will change when the next survey is released.

If you’re considering signing up for any identity theft protection service, read the terms and conditions carefully before handing over your credit card number to see what you’re really getting for your money. And be sure the price is nailed down, including what happens after any free introductory period ends. Also watch for arbitration clauses that could ban your joining a class-action lawsuit should problems arise. And read How to Recover from Identity Theft  for more information on what to do if your data gets hacked.