Credit monitoring pros and cons
Credit monitoring can alert you when someone has fraudulently opened a new credit account in your name. But despite some of the marketing hype, credit monitoring is limited in “protecting” your identity because it can only detect fraud, rather than prevent it.
Also, many people may not realize that credit monitoring does not alert you to fraudulent charges made on a credit card you already have.
Be aware that there are free and low-cost alternatives to credit monitoring (as shown in the table) to address identity theft, and choose what’s right for you.
(Excerpted from GAO-17-254)
What about the other services?
- Identity monitoring services monitor sources other than credit reports, alerting you when your identity appears in things like arrest records, sex offender registries, change-of-address requests, or black market websites where criminals buy and sell personal information. However, it’s unclear how effective this is in actually mitigating identity theft.
- Identity restoration assists you in recovering from identity theft, but the level of service provided can vary. Some companies provide hands-on assistance—for example, notifying government agencies, reviewing public records to determine the extent of the fraud, and working with credit card companies and collection agencies on your behalf. Other companies may only provide advice on what actions you should take on your own.
- Identity theft insurance reimburses you for out-of-pocket expenses related to the process of restoring your identity and credit record. These expenses include things like postage and notary fees; costs related to obtaining credit reports, implementing credit freezes, or replacing documents; and attorney fees. The insurance generally doesn’t cover direct financial losses. In practice, the value to consumers of identity theft insurance is limited—largely because the process of resolving identity theft typically does not require significant expenses. We found that the number and dollar amounts of identity theft insurance claims appear to be quite low.