Why Identity Theft Protection Is a Waste of Money

It’s likely you've received a notice that you may have been involved in a data breach, and often it’s to let you know that there’s a class action settlement of which you can become a part…….for a fee, of course. Let’s face it, even if you do get involved, the likelihood of getting more than $10 in a settlement is slim. Identity Theft Protection (ITP) services promise to monitor your financial and online life and alert you if your personal information is compromised in order to steal your identity. This can involve anything from using your credit cards to make illegal purchases to more complex schemes that use your information to borrow money or open accounts in your name, potentially ruining your credit score and leaving you with an enormous mess to clean up. Considering the damage that identity theft can do to you, paying for ITP seems like a pretty good idea. The fact is that while there’s nothing wrong with using an ITP, you don’t need them — you can do just about all the important stuff yourself.......for free. Typically, ITP services monitor credit reports for new accounts and other suspicious activity, social media accounts for your personal information like your phone number or Social Security number, Dark Web sites that serve as data-brokers trading in stolen information, and your financial accounts for suspicious withdrawals or unauthorized access. These are all things you can do yourself. You can access your credit reports for free once a year. You can also open a free Credit Karma account and see your credit score at any time free of charge. Checking your bank account is also something you can do without charge, and it’s recommended that you do so regularly. If you do see something you didn’t authorize, you can notify the bank immediately and they will most likely reverse the charge. You can also freeze your credit, which prevents anyone — even if they have your personal information — from getting a new credit card or loan. In the end, identity theft protection is kind of like a car alarm: It might make you feel better psychologically, but it doesn’t actually do much. All you really need to do is take a few simple steps on a regular basis and you’ll do everything these services promise just as well — and maybe even better, since you’ve got some skin in the game.