Be Wary of Free or Cheap Credit Monitoring and Identity Theft Services

Identity theft is a rampant concern for nearly all consumers. Unfortunately, certain enterprising companies have decided to capitalize on consumers’ fears by offering credit and identity theft monitoring services “free” of charge. Relying on the companies’ advertisements and bold claims, many consumers are proactively enrolling. Consumers seem to be unaware that some of these identity theft/credit monitoring services have faced federal fines for unfair and deceptive trade practices stemming from misleading and deceptive advertisements. Consumers seem equally unaware of how these companies make money by selling the consumers personal information and actually increasing the chances of identity theft for the consumer. Unnecessarily using the wrong credit monitoring or identity theft monitoring service may unintentionally expose consumers to greater financial risks and privacy intrusions. Therefore, all consumers should think before they sign up for a “free” or inexpensive identity theft or credit monitoring service.

REDUCING YOUR CHANCES OF IDENTITY THEFT

Clearly, consumers should take advantage of opportunities to prevent identity theft, including the monitoring of their credit.  For example, all consumers should review their full credit reports. Under federal law, consumers have the right to request their credit report from each of the three major credit reporting agencies – Transunion, Equifax, and Experian – once per year for free by visiting here.  AnnualCreditReport.com is the official website sponsored by the three major credit reporting agencies and authorized under federal law to provide consumers with their free annual credit reports. Don’t be fooled by look-alike sites. You can be sure that you are on the right site by typing www.AnnualCreditReport.com directly into your browser address line.

Many consumers believe that reviewing their FICO credit scores is enough.  But, some victims of ongoing identity theft have normal credit scores.  Moreover, your credit score is only a number used to gauge your creditworthiness. Viewing your full credit report is the only way to detect anomalies, such as unauthorized lines of credit.

Although we recommend that consumers avail themselves to the free information from the three credit agencies above as an alternative to signing up for a “free” or cheap credit monitoring / Identity theft service from a for profit company, here is a tip for consumers who feel compelled to sign up for these services: Though it is painful to read the fine print, carefully review the company’s privacy policy and terms and conditions.  In order to offer a free service, a company must have some alternative source of revenue generation, such as providing targeted advertising or leasing consumer’s data to third parties.  Therefore, consumers should scrutinize the “fine print” to determine how their personal information will be used.  Scrutinizing the “fine print” also includes analyzing the details of the services being provided.  Does the company only alert you when an apparent breach occurs, or does the company assist in the identity theft recovery process?

RISKS OF RELYING ON “FREE” OR CHEAP CREDIT MONITORING AND IDENTITY THEFT MONITORING SERVICES

Generally, “free” credit monitoring and Identity Theft Monitoring services are limited in their ability to detect new forms of identity fraud, such as identity theft involving health insurance, taxes, utilities, Social Security, Medicare, and Medicaid.   These services also tend to use only one of the three credit reporting agencies as their monitoring source.  If an identity thief opens a new line of credit with a company that uses Equifax, for example, a credit monitoring service that is relying on TransUnion will not be alerted to the fraud.

These types of Credit Monitoring and Identity Theft monitoring services are also susceptible to false alarms from pre-authorized “soft pulls” for marketing purposes, which may cause consumers to ignore legitimate fraud alerts.

Finally, victims of identity theft will spend many long hours on identity theft restoration. Many “free” or cheap services advertise identity theft restoration services, but in reality, the restoration services are limited to directing victims of identity theft to free and publicly-available basic restoration checklists, such as the Federal Trade Commission’s Identity Theft Restoration guide, which is available for free to the public here.

Most importantly, certain “free” or cheap credit monitoring or identity theft monitoring services have increased cybersecurity risk profiles.  Specifically, identity thieves often target credit monitoring services to steal customer information because those companies must store their customers’ private information in order to provide credit monitoring services.  Again, we believe this is a reason to avoid these services, but if a consumer feels compelled to sign up for one of these “free” or cheap services, the consumer should determine the following: 1) How does this service use my personal information, 2) How will this service actually help me if my identity is stolen, and 3) How does this service store my personal information?

CONCLUSION

Proactively signing up for free or cheap credit monitoring and/or identity theft monitoring services may actually increase the risk of identity theft because consumers are entrusting the company providing the services with their personal information.  This is primarily because your personal information is often being transmitted, leased, or disseminated to third-party marketing companies that may re-sell or re-lease the original data to more unscrupulous advertisers.  Once a consumer’s personal information is transmitted to a third-party, that consumer loses virtually all control over how it is disseminated in the future.

ABOUT VERNON LITIGATION GROUP

Vernon Litigation Group is based in Naples, Florida, with additional offices in Orlando, Florida, and Atlanta, Georgia. https://vernonlitigation.com/. One of Vernon Litigation Group’s missions is to assist in the recovery of client losses relating to cybersecurity and identity theft. Vernon Litigation Group handles cyber litigation cases including identity theft, claims brought under Florida’s Deceptive and Unfair Trade Practices Act, negligence, financial fraud, misappropriation of identity, unauthorized transactions by employees, and civil penalties involving Florida’s Data Breach Notification law.

For more information, contact:

Vernon Litigation Group

Phone: (239) 319-4434

E-mail: info@vernonlitigation.com

Attorney Chris Vernon

Mr. Vernon handles the litigation and arbitration of complex business and financial disputes, with an emphasis on securities fraud and securities arbitration, throughout the United States.

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