There's no shortage of companies offering to help protect you against fraud. But, as with your personal information, be careful.
By DAVE GUSSOW
Published April 12, 2004
Dr. James Swoager thinks prevention is great medicine against identity theft.
The Clearwater physician shreds personal papers. He takes his mail to a community mailbox. And he subscribes to Identity Guard, a service that monitors his credit reports and sends him warnings about any unusual activities.
"I tend to be a cautious person in general and take precautions about a lot of things," Swoager said. "You read about the nightmares people go through when (identity theft) does happen to them."
So Identity Guard's $13-a-month subscription fee is worth it to Swoager, who says doctors run a high risk of identity theft because of all the paperwork they handle that includes personal information.
With identity theft cases sweeping the country, people want protection and help. And there's no shortage of services available, from credit bureaus, insurance companies and other businesses.
Identity theft costs consumers and business more than $50-billion a year, according to the Federal Trade Commission. About 10-million people were victimized in 2002.
Financial institutions and credit card companies get left holding the bag for much of the monetary loss. But individual victims can spend hundreds of hours and thousands of dollars trying to clear their names and credit records.
And that's where the protection services come in. Some hold out the promise that early detection through continuous credit monitoring and alerts will kill the problem before it becomes a major headache. Some offer help with paperwork and forms to clean up the mess.
Yet experts say consumers can do more for themselves and better spend their money on other areas to protect themselves.
"Identity theft protection services typically are not worth the money," said David Heim, deputy editor for special sections at Consumer Reports magazine.
The magazine found insurance coverage too limited and "of dubious value." It said consumers requesting individual reports from a credit bureau (about $9 each) on a regular basis should be sufficient.
In fact, some companies such as Providian and Citibank offer free services to their customers to keep tabs on their credit reports or help deal with ID theft problems.
Yet the number of services keeps growing, as does the public's interest in signing up. A survey last year showed that 16 percent of U.S. consumers had signed up for some kind of protection product.
One issue to consider when choosing a service is whether it checks one, two or all three of the major credit agencies, Equifax, Experian or TransUnion. Checking just one service may not discover a problem.
Insurance companies such as St. Paul Travelers and AIG offer ID theft protection policies. Typically, policies cost $25 to $50 a year and cover the costs of cleaning up the problem, such as lost wages, mailing and phone bills and attorney's fees. Some, such as USAA, include identity theft protection in homeowner policies without an extra charge. Policy limits generally are $15,000 to $25,000.
"Year over year, we have seen significant increases in the number of people who are looking at this endorsement" for their homeowner's policies, said Joe Lester, identity theft product manager for St. Paul Travelers.
It has offered the endorsement since 1999 and recently added a master policy available to employers who want to offer ID theft protection as a benefit to their workers.
Even more prevalent are companies offering credit monitoring services, with names such as Identity Guard, Identity Theft Shield, ID Fraud Intercept and Identity Safeguards.
Typically, these services can cost $30 to $150 a year. Depending on the service and how much a consumer is willing to pay, alerts can be sent by e-mail, mail or phone within 24 hours if there's suspicious activity in a credit account.
If it is a case of stolen identity, some of the services also offer to help with the paperwork and forms needed to straighten out the problem. Some assign personal "advocates" or counselors to assist.
"We're starting to see two unique audiences using Equifax's Credit Watch products," said Chris Atwood, Equifax's vice president for personal solutions. "One is definitely concerned about identity theft and uses it an insurance measure. The other is a consumer who understands how important credit management is to their overall financial management system."
Most people choosing Credit Watch go for the gold plan, more expensive at $9.95 a month but with daily monitoring and faster alerts, Atwood says.
Anecdotally, he said, "Now we're seeing more detections, more stories about people who didn't prevent (identity theft) but nipped it in the bud."
Beyond traditional businesses, identity theft has opened up some entrepreneurial opportunities as well. Patte Plount of Positive Reflections in Palm Harbor was a victim of mistaken identity.
It affected her credit rating, and it took her years to straighten out the problems. But the process was a learning experience, and friends later turned to her for help when they ran into credit problems. So she started the business.
"I started doing this long before identity theft was an issue," she said. "We just called it simple fraud."
Plount, 46, charges $50 an hour, plus expenses. Her services include filing reports with law enforcement, credit bureaus and the FTC. She provides reference letters, including from lawyers, and uses a police officer as a consultant.
Heim of Consumer Reports suggests antivirus and firewall protection for computers, and better practices that include "being stingy with your information."
"There's no reason why you should have to cough up your Social Security number or your mother's maiden name to rent a jet ski," he said. "You can also be wary of e-mail and be cautious about opening e-mail from unknown sources. For 30 bucks, you can go to Staples and buy a shredder."
If people decide to use a service, says special agent supervisor Mike Phillips at the Florida Department of Law Enforcement, they should do some homework to make sure it's a legitimate business, including checking with the Better Business Bureau.
Last year in Arizona, for example, two brothers were accused of running a bogus protection service that bilked thousands of people out of $20-million, according to the Federal Trade Commission.
Phillips, an expert in fraud and identity theft, doesn't recommend specific companies, but said: "From my personal experience the three major credit bureaus do a pretty good job at these same types of services. They also offer several protective services and they are the housing authority on your credit."
- Information from Times wires was used in this report. Dave Gussow can be reached at gussow@sptimes.com or 727 771-4328.
