For many consumers, identity theft companies provide peace of mind for a nominal monthly fee. Only two or three decades ago, identity theft wasn’t that common. But with more people carrying credit cards and the growth of the internet revolution, criminals have found multiple opportunities for financial gain at the expense of others. When the reports of identity theft and fraud began growing at alarming rates, those who were caught received little more than a slap on the wrist. Then in 1998, Congress passed the Identity Theft and Assumption Deference Act which made the crime a federal offense with strong penalties. State legislators have also passed legislation so that the criminals, when caught and convicted, can be sentenced to prison time as well as fines that include making restitution. In the Old Testament Law, the punishment for stealing a person was severe: “And he that stealeth a man, and selleth him, or if he be found in his hand, he shall surely be put to death” (Exodus 21:16). The modern equivalent to stealing someone is to fraudulently take that individual’s identity for personal economic gain. The Old Testament punishment is too severe for modern sensibilities, but until federal legislation was passed, law enforcement officials oftentimes couldn’t even charge the thief with a crime. It took time for the law to catch up with the criminals. Fortunately that has changed. Additionally, the burgeoning industry of identity theft companies offers services to help customers lower the risk of being victims of such criminals. When wallets or lost or stolen, it can be a time-consuming task to contact all the credit card companies, cancel accounts, and open new ones. But this is a necessary task to prevent unauthorized charges (though the cardholder is seldom, if ever, responsible for unauthorized charges if the card is reported missing within a reasonable amount of time). Sometimes, though, the consumer may be unaware that an account is being used to make purchases. Somehow the thief got hold of the data without taking the actual credit card. Perhaps in reviewing the statement, the consumer notices purchases that he didn’t make. Or perhaps the consumer realizes something is wrong when the card in question is rejected when the cardholder is trying to make a purchase. In these scenarios, identity theft companies can assist the consumer. The company staff takes care of notifying issuers about lost or stolen cards and reporting unauthorized usage. When consumers sign up or register with this type of company, they provide personal data, such as birthdates and social security numbers, and also financial information about all their open accounts. Even when consumers have engaged the services of identity theft companies, they are well-advised to keep copies of credit cards or a listing of the cards and numbers in a safe place for personal reference. It’s also a good idea to carry only one or two credit cards and leave the rest in a secure place at home. This way, if a wallet or purse is lost or stolen, the ramifications will not be as severe as if one’s entire collection of plastic is gone.
If this was the only service that identity theft companies provided, the monthly fee could probably be put to other uses. And there are certainly steps that consumers can take to protect themselves, such as shredding credit card offers, utility bills, and monthly bank statements. They can also take great care when giving financial information over the phone or in public. Consumers can also get free annual copies for the credit reports from the major reporting agencies. But the value lies more in the preventative services that are provided to consumers. Most companies use innovative technology and applications to monitor their clients’ information on all kinds of consumer databases. Through complex programs and identifiers such as date of birth and social security numbers, the companies build personal information reports on their clients. The client receives regular updates which can be reviewed for accuracy and completeness. Additionally, the applications allow the identity theft companies to track fraudulent attempts to access their clients’ financial information. Immediate steps can be put in place to stop fraud before it begins or to significantly reduce the negative ramifications for clients whose information is compromised.
Identity theft or fraud insurance is another important service provided by identity theft companies. These policies reimburse clients for the financial losses they may incur due to unauthorized use of credit information and also for lost wages and other expenses incurred while correcting false information and restoring creditworthiness. This can be such an expensive and time-consuming task. Having someone else take care of these exhausting details may be worth the monthly fee. Other services include ending junk mail from arriving in their clients’ mailboxes, placing fraud alerts, when necessary, on credit reports, and setting up a routine schedule so that clients receive copies of credit reports on a regular basis. These preventative measures can help consumers avoid becoming victims. Homeowners may not be aware that some homeowner policies contain provisions regarding this type of theft and fraud. But the protection may not be as comprehensive as that offered by reputable identity theft companies. Consumers have a responsibility to protect their personal and financial information. But turning over some of that responsibility to a company specializing in identity protection is an additional safeguard. No one wants to be a victim of identity theft or fraud. A monthly fee may be a very small price to pay to ensure it doesn’t happen.