Monitoring vs Fraud Alerts
Fraud Alerts Vs Credit Monitoring
The following will give you details about credit monitoring, fraud alerts and proactive identity protection services and will allow you to make an informed decision as to which service is the right choice for you.
It wasn’t too long ago that credit monitoring was your only choice and the bureaus only monitored their own credit reports. The rise of new competition from proactive identity protection companies like LifeLock, LoudSiren Debix, and Trusted Id ended the monopoly the credit bureaus once had and forced them to further expand their offerings. Pressure at the state and federal levels also forced the credit bureaus to change requiring them to offer free fraud alerts for anyone requesting them per the FACT Act passed by Congress. A fraud alert requires the bureaus to put your phone number in your credit file. A creditor such as a bank is then required to call your phone number for approval of the loan or transaction that they are processing. These fraud alerts expire every 90 days and must be renewed. The Fact Act also required all three credit bureaus to report any fraud alert they receive to the other two bureaus, but some studies have shown they do not always do this. We advice you to call all three bureaus yourself to insure the fraud alerts are in place or use an identity protection company to do this for you. We also have some concerns with the credit bureaus, Equifax, Transunion or Experian being your Identity Protectors as their primary source of revenue is from selling your information, most notably for pre-approved credit cards and insurance offers, and it is a bit contradictory that they are viewed as a possible solution for identity protection.
Currently Equifax has the best offer of the three bureaus. For $9.95/month they will monitor your Equifax credit report, notify you within 24 hours of any change to your Equifax report, and provide you with $20,000 of Identity fraud coverage. This is not recommended by Idenity Theft Labs as it only covers you at Equifax and does not alert you to the theft of your money from the other two credit bureaus. Experian and Transunion have similar options. For $12.95/month Equifax will, in addition to the above, monitor the other two bureaus as well, plus give you a free 3 bureau credit report, and unlimited access to you Equifax credit report. This is the recommended service if you prefer monitoring. For $2.00 extra per month you can add an option that will allow you to lock and unlock your Equifax credit report. Again this does not add much value as it only applies to Equifax.
In comparison Identity Protection Companies offer identity theft insurance up to $1,000,000, a 3 bureau credit report, identity restoration services, pre-authorized credit card removal and 3 bureau fraud alert setup and renewals. The essential difference between the two is that credit monitoring is not proactive in that you are only informed about credit changes after they have already happened leaving You to clean up the mess. With proactive protection you are being informed before or as it is happening and you have the option to deny the requested approval. This is no small matter as it will protect you from the agonizing, emotionally draining process of restoring your credit and good name. It can also lead to the arrests of the creeps who are perpetrating this horrible crime. Identity Protection services from LifeLock and LoudSiren are also cheaper than credit monitoring.
One has to remember that both offerings are viable options, in fact some people have combined both services, employing fraud alerts for protection and insurance while additionally monitoring their credit. Regardless of your choice you must be aware of what you are getting. Monitoring of one bureau only is not going to inform you every time your credit has been used by an identity thief, it will only inform you if the creditor went through the specific bureau you signed up with. Fraud alerts will stop a strong majority of identity thieves in their tracks, but not all of them. Sure your Bank will call, as required when they see the fraud alert, but do you really think an owner of a business who has ties to an organized identity theft crime ring is going to call. It is important to realize that no full proof method exists to stop identity theft and there will probably never be one. This is why an identity theft insurance policy is of great importance and is highly recommended by Identity Theft Labs.
The $20,000 identity theft insurance offered by Equifax is probably enough to cover most identity theft cases but we recommend that you significantly reduce the chances of having to use an insurance policy by utilizing fraud alerts. The additional coverage provided by LifeLock, LoudSiren, and TrustedID does add to ones peace of mind and when lawyers become involved in an identity restoration case its not hard to see how $20,000 can get eaten up quickly. As always we recommend that you review the insurance policies and/or guarantees provided by any company you are thinking of signing up with.
With over 217 million personal and private records being compromised in the last three years we can’t stress enough how important it is for you to have an identity protection plan in place. How you protect yourself from identity theft is and always has been your choice but we do implore you to do something, anything before you too become another stat like the 10 million identity theft victims in 2007.