Protecting your identity is a smart thing to do

D ecember is Identity Theft Prevention and Awareness Month. According to the February 2007 Identity Fraud Survey Report issued by Javelin Strategy & Research, identity theft affected approximately 8.4 million people.

The estimated loss to business and individual victims was $43.9 billion. Often, ID theft victims don’t even realize their identity was stolen. They may find out when a creditor or collection agency calls or a credit card is declined. To help consumers protect their identity, a number of credit monitoring and insurance protection programs are available. But, are these products right for you?

Most experts recommend that you obtain a copy of your credit report at least once a year from each of the three major credit bureaus (Equifax, Experian and TransUnion) to ensure accuracy and to look for signs of ID theft. Since information on your credit report changes constantly, once per year may not be often enough. You may want to subscribe to a “monitoring service.” Credit bureaus or other companies usually offer this service for about $30 to $150 per year, depending on what is included.

According to the Federal Deposit Insurance Commission (FDIC), a monitoring service may provide, for example, an automatic copy of your credit report from one credit bureau or all three major companies, on a quarterly or monthly basis. You also may be able to obtain e-mail notices of any changes in a credit report, sometimes within 24 hours. The most important alert is one telling you that an account has been opened in your name. If you do not recognize it as your account, you can take immediate action to get the account closed.

If an ID thief uses your name to commit fraud, you are likely to incur expenses trying to correct your files or otherwise defending yourself. That is why some insurance and credit card companies now sell “ID theft insurance.” These types of policies typically cover expenses such as lost wages; fees associated with reapplying for loans you were denied; and the costs of mailings and phone calls to creditors, credit bureaus and law enforcement agencies. The policies may also cover certain legal fees.

The policies do not, however, cover losses for which you are liable by law or that are otherwise not reimbursed by a financial institution or merchant. It does not fix your credit standing nor clean up a criminal record acquired in your name by the thief.

Some consumers may already have this insurance at no extra charge through their homeowner’s insurance or their credit card. If not, you may be able to purchase the coverage separately.

You should get the opinion of someone knowledgeable, like a financial planner or an insurance professional. Always check out a company with the BBB before making a purchasing decision.

Start with Trust… Contact the Better Business Bureau for a reliability report on any business or charity by calling 432-563-1880, toll-free 800-592-4433