Identity Theft Protection Plans
The rapid increase in Identity theft along with increasing awareness toward the #1 Crime in America, has spawned a number of companies now offering Identity Theft Protection Plans.
I will cover and categorize many as:
Reactive - Semi Reactive - Proactive
IDT Protection Plans
First, I want to make this very clear, when you shop for Identity Theft protection.....
Do Not Allow ANYONE to tell
you they can prevent Identity Theft
You Can't!! No one can!!!
The best you can do is to change a few habits and take steps to protect yourself from this crime. You can't do it by yourself regardless of what you hear.
Here are a few reasons why:
- Thomas Chapman of Equifax states: "Checking you credit report even 3 times a year is like using your smoke alarm only on weekends."
- If you don't know about a new account or changes to your credit report within 60 days, you could potentially be 100% responsible for that debt even it you didn't make it. (Fair Credit Billing Act)
- The time and money needed to restore your identity if you become a victim.
- None of these plans have provisions for areas of Identity Theft.
"How do I wade through all these Protection Plans?". "What should I look for?"
Great questions.... next, I will categorize many of the various plans presently on the market today.
Reactive Plans
Every identity theft protection plan I have read so far that has been offered by a major insurance agency only comes into effect AFTER you have become a victim of IDT. Some companies wrap this coverage into your home owners policy and guess what.... I know one company that you have no choice, you HAVE to pay for it - it's not an option!!
Here's what else they do or don't do. these plans will REIMBURSE you for your expenses (you've already paid)...
- Notaries
- Certified Letters (some policies have deductible, you can send a lot of letters at that price!)
- Lost wages up to X dollars per day - (Some say 'sorry' if you are self-employed)
Then these companies will give you a phone number to help "walk-you-through" the process of restoring your own identity. You, are doing all the leg work. You, are spending your time and money to restore you identity. then, you need to fill our forms to make claims so you can be reimbursed. You also need to check to see if your insurance rates will increase or will you be dropped if you file an Identity Theft claim.
Now you have determined that you need legal assistance to restore you identity. So you call your agent, who calls to get an approval or denial to use an attorney and whether or not an attorney is covered. Then, they will pick the attorney for you. Does the attorney have experience with Identity Theft? Is the attorney reputable? Will you have access to them?
Hopefully you can yes to all of these questions.
Semi-Reactive
This area could be broken down further into Low Semi-Reactive and High Semi-Reactive as Mr. Mike McCoy does in his book Identity Theft: The Silent Crime.
These identity theft protection plans offer a higher level of protection for their clients. Some will place fraud alerts on your credit report while other place freeze on your credit report.
Credit monitoring in another benefit a few companies offer their clients. Again, different companies response to an alert vary widely from being notified in 24 - 48 hours to couple of weeks.
As with all the Reactive Protection Plans, the Semi-Reactive Plans focus primarily on Financial IDT. AT this level, some extend their coverage to include Social Security and/or Drivers License IDT. These plans also will provide a phone number or a case worker to walk you through the process of restoring your won identity.
An additional benefit here will sometimes, *sometimes* have someone write letters on you behalf. If you need legal access, again, you are at the mercy of the companies policies and permissions to ALLOW you access to legal counsel. Counsel of THEIR choice, the previous questions apply here as well.
I called one of the more prominent IDT Protection companies and asked them point blank,
"What would you do if someone stole my medical identity?"
Not surprisingly, I heard a delay in their response. I was then told I would need to talk with marketing services. When I posed the smae question to them, again I initially heard silence, then I was told I would be referred to an attorney in my area.
- First problem with this is we know that identity theft is a national problem and my identity could be used in another state.
- Secondly, not all attorneys are created equal. I asked what specific qualification the attorney had and I was told, "He is an licensed attorney." I asked if they specialized in IDT and again, I was told that they were licensed attorney. Can just any attorney request to service this company? Scary thought if you ask me.
- Thirdly, most guarantees are offered luring you to falsely believe you have more coverage then you really do. A false sense of confidence is instilled.
Mike McCoy from Iowa State University is co-author of The Silent Crime a book about Identity Theft. Mr. Mike McCoy and Dr. Stefan Schmidt developed the first class teaching Identity Theft in the country. This interview on Fox28 with Mr. McCoy talks briefly about Identity Theft and the effects on individuals.
Watch Mr. McCoy
Proactive
Proactive Protection Plans address ALL 5 areas of identity theft. In addition, besides being a contact for questions, the have individuals to restore your identity FOR you. this is a HUGE benefit.
You don't have to spend the 20 - 500 hours
to restore your own identity.
You won't have to miss work, this company will do the leg work for you.
When you call the Social Security Administration or Drivers License Bureau and tell them you are a victim of IDT and you want a new card, they don't know if you are the 'good guy' or the 'bad guy'. Making it VERY difficult for the average individual to straighten out the problem of identity theft on your own.
In the event of Medical IDT, no other company that I have found has the wherewithal to circumvent HIPAA legislation to correct a medical record legally, restoring your identity to where it was prior to the event.
Access to attorneys in he event of identity theft may be critical!!
Regarding minors, children, and identity theft protection. Presently, federal law prohibits credit monitoring on minors. What you can do is place either a fraud alert or a credit freeze on their credit report at all 3 credit repositories. This needs to be done every 90 days. You should also periodically check their Social Security report in the event someone is using their Social Security number.
In summary, not all IDT protection plans are equal. In fact, you really need to be aware of what the plan will actually do for you.
I do believe that any protection is better than none. If you're going to spend money to protect your identity, wouldn't you want to get the biggest value for your hard earned money?
Read the policies and compare before being persuaded by an inferior Identity Theft Protection Plan.
