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Sorry. We've Lost Your Personal Information! Now What?
by Susan Trost

OK. I’ve just received another “computer tapes containing some of your personal information were lost while being transported to an off-site storage facility by our archive services vendor. While we have no reason to believe that is information has been accessed or used inappropriately, we deeply regret that this incident occurred.” letter. The letter goes onto say that my name, address, social security number and account number were on the files. However, never fear because they are offering me credit monitoring and $25,000 in ID Theft Insurance. This is the third letter I’ve received this year alone. What will next year bring? Identity Theft is not going away and continues to be the fastest growing white collar crime.

Chances are likely that you’ve also received a letter in the mail indicating that a computer was lost or stolen or a database hacked with your sensitive information on it (Veterans Administration, TJ Maxx, Bank of America, ChoicePoint, the Colorado child support system and new hire database to name just a few). Generally, they will say “However, we have no reason to believe that the information will be used for Identity Theft.apostrophe Some companies will even give you a false sense of security by paying for credit monitoring services for a period of time. Unfortunately, only 28% of Identity Theft is financial and credit monitoring doesn’t even address all areas of financial ID Theft. Criminal ID Theft is the second most common type. Social Security, Medical and Drivers License round out the top five.

Chances are also likely that you own or have been offered some form of either “freeapostrophe or “fee-basedapostrophe Identity Theft Service from your bank, credit union, Credit Card Company, credit monitoring company or even your homeowners insurance. It is critical that you take the time to explore what you really have. There are so many restrictions and exclusions on many of these policies, that they won’t really help you in your time of need. Some even only cover ID Theft relating to their specific account.

We’ve all seen and heard the ads for an ID Theft protection service where the CEO gives his social security number out because he is so confident that locking down his credit file and opting out of pre-approved offers will protect his identity. His identity was recently stolen and used to take out a loan from a creditor who offered instant credit without checking his credit report. More importantly, locking down his credit will do nothing to protect him from the other financial ID theft and fraud (banking, checking, and retirement accounts), medical insurance ID theft, social security ID theft, driver’s license theft, and criminal ID theft. The services offered are things you can do yourself for free. Lawsuits are being filed against this company for not doing what they “promised.apostrophe

I’ve had people tell me they are not at risk for Identity Theft because they shred everything and do not shop online. Unfortunately, the real risk lies in the “Databased You.apostrophe Your information lives in so many paper files and computer systems that you have absolutely no control over. Even a quick look around your doctor’s office might reveal open-shelved medical record filing. Almost all tell me that they have a cleaning crew come in at night. Some fraud rings operate cleaning services for this reason alone – to gain access to sensitive information when no one is watching.

Now is the time for you to get a clear understanding of the different types of ID Theft Services and Insurance. It is not if you will be a victim, it is when. Therefore, you don’t want to be dealing with trying to unravel the nightmare only to find out what you thought you had in a service and insurance had so many exclusions and fine print that it is not going to help you out in the least.

Be cautious of any service that claims to “preventapostrophe identity theft. There are things you can do to minimize your risk and minimize the nightmare when it happens to you, but there is absolutely nothing that will protect you from becoming a victim. Also, watch out for the “free trial period.apostrophe I just received a call from my credit card company last night offering me a free month of service. I started asking questions and found that the service would not really do what I would need it to do – despite some of the slick marketing phrases.

As I was researching and comparing services, there was one service that sounded wonderful. When I called, I was assured that everything would be covered regardless of what happened. When I asked to see the details of the guarantee, I was told there was nothing available for me to review. The website spoke of them restoring my credit. What about everything else that can happen? I want something in writing to know exactly what I’m getting.

Be sure to keep this article handy for future reference. I was wondering if I could suspend my current ID Theft Shield service while I had the “free serviceapostrophe and quickly realized that would be a big mistake. While I have duplication on the continuous monitoring now, my husband would have had no monitoring or restoration services. The $25,000 Identity Theft Service would leave me doing the majority of the repair (average of 400 hours) and the exclusions and limits on the policy would have not helped me out much financially. I also would be giving up true restoration with a licensed investigator and that is what helps me sleep better at night.

Credit Monitoring Services:

  • Credit Monitoring usually costs between $10 and $30 per month.
  • Most services only monitor one of the three credit bureaus. Keep in mind monitoring is not a 100% system. Some creditors report daily, quarterly, monthly, yearly or not at all. Instant creditors don’t even check your credit report. Some creditors report to one company or all three. Monitoring is only as good as the companies reporting in a timely manner.
  • Look at the frequency that the report is monitored. The best services provide continuous daily monitoring and a nightly download from the Postal Service for change of addresses. This is the best method for early detection of mail diversion and types of ID Theft that would show up on a credit report.
  • Monitoring services alone only let you know the nightmare is about to begin. You are on your own to do all the notification work and restoration.
  • You must follow-up on new activity on your credit report. Only you can tell if something is valid or not.
  • Business owners who personally secure loans must keep a close watch on their credit score. If it plummets, the loans will be called and could shut down the business.

Thoughts: Credit Monitoring is an important thing to have, especially if it is continuous and looks for things like inquiries, new accounts, late payments, new mortgages, new car loans, change of address, or derogatory comments. Remember, it is not 100% and only shows a portion of financial ID Theft problems that can occur.

Identity Theft Reimbursement Services:

These ID Theft “insuranceapostrophe coverages give consumers a false sense of security. The marketing says “$2 million in Identity Theft protection.apostrophe As the saying goes, “The bold print gives and the fine print takes awayapostrophe really rings true on these policies.

  • One service has a $2 million guarantee. The fine print says it is only for accounts related to your credit report. Therefore, your banking, checking, and retirement accounts are all excluded.
  • Another service said their $1 million guarantee only kicks in when there is a “failure or defectapostrophe in their service which locks down your credit reports and opts you out of credit offers. Once again, financial ID Theft only makes up 28% of all ID Theft crimes and issues relating to credit reports are only a portion of that. Not very comprehensive coverage.
  • Watch for vague wording like “Usually, we will pay these expenses on your behalf.apostrophe
  • Expenses like legal fees and time away from work can add up quickly and create a financial hardship