Congressional investigators suggestID theft services that charge fees are a waste of money. Photo credit: Getty
ID theft services, which offer to help consumers monitor their credit accounts or restore identities for a fee, are a waste of money, suggests a new report from the investigative arm of Congress, the Government Accountability Office.
“We did not identify any studies that analyzed whether consumers who sign up for or purchase identity theft services encounter fewer instances of identity theft or detect instances of financial or other fraud more—or less—rapidly than consumers who take steps on their own,” the authors say.
Additionally, the services could actually create more opportunities for hackers to steal from you, the report observes. “One consumer group representative noted that identity monitoring services require consumers to provide additional personal information to enroll—which also could be compromised if the service provider’s information were breached,” the GAO report states.
The authors point out the services have limitations: among them is the vendors don’t address all data breach risks.
The Federal Trade Commission and Consumer Financial Protection Bureau urge people considering paying for ID theft services to compare them with free or low-cost options before signing up.
Hackers can make purchases, take out loans or seek medical care in a victim’s name with stolen financial account numbers, passwords and Social Security numbers.
If you haven’t been a victim of ID theft, you probably know a few people who have.
The study notes one of 10 individuals 16 and over claim they suffered ID theft in 2016.
Fortunately, for most the problem is not a red tape nightmare.
Most people resolve ID theft issues in a day.
The study points out few of the 22 million victims from the 2015 Office of Personnel Management used the free package of credit and identity monitoring, insurance, and identity restoration services offered.
About 3 million signed up for the offerings which resulted in 61 people receiving insurance claims averaging $1,800.
The harm from ID theft can be more than financial. About 10 percent of identity theft victims surveyed three years ago reported suffering severe emotional distress.
To prevent a hacker from setting up new credit accounts in your name, GAO recommends requesting a free credit freeze at each of the credit reporting agencies: Equifax, Experian and TransUnion.
Freezes, however, don’t prevent tax refund theft or medical identity fraud.
The report’s authors strongly urge you to keep the personal identification number the credit bureaus will give you to unfreeze your reports in an unforgettable place to make it easier to apply for loans or consumer credit.