These services promise to protect your identity from theft, but they actually can't

According to the Insurance Information Institute, 1 in 15 people is a victim of identity theft, while 1 out of 5 of those experience it more than once.

And while you read that sentence, at least 1 more person fell victim to identity theft because an attack is successful every 2 seconds.

Are you convinced yet?

In this article, you will understand what identity theft is, how do you tell whether you are a victim of it, what your protection options are, and others.

The Equifax Data Breach

In 2017, Equifax, an American credit reporting agency, announced they had a data breach that revealed the personal information of 147 million people.

A vulnerability in the Equifax web application was exploited, and, as a result, the leakage uncovered names, SSNs, birthdays, addresses, credit card information, and others. With that information, hackers can, in their target's name:

• Open accounts
• File for tax refund
• Claim unemployment benefits
• Get medical benefits

And many others.

It is very important to understand:

1. What identity theft is
2. How you can tell if you are a victim of it
3. How you can protect yourself

What is identity theft?

• Types of identity theft
• How do you become a victim of identity theft?

Identity theft is an attack in which someone steals your private data and uses it to impersonate you in order to gain benefits.

It is an extremely dangerous type of attack because it may take a while before you notice that something is wrong.

And because identity theft comes in many forms, it is hard to keep track of all of them.

Plus, attackers keep coming with more and more creative ways to impersonate and benefit off of their targets.

Types of identity theft

Here are some of the ways in which hackers can use your personal information to profit off of you:

• Financial theft, which is the most common
• Medical theft
• Tax theft
• Unemployment/Employment theft
• Child identity theft

Financial Theft

In this kind of attack, people who own your private data can, in your name:

• open new accounts
• make loans
• make purchases

Medical Theft

When performing medical theft, hackers may:

• use your insurance
• obtain medical service in your name
• get prescription medication

Tax Theft

Tax Theft involves an attacker that fills a tax return in your name and collects the refund.

Unemployment/Employment Theft

In these types of attacks, fraudsters will use you to:

• collect your unemployment benefits
• pass background checks
• obtain jobs in your name, so you pay the taxes

Child Identity Theft

This is similar to Financial Theft but uses the fact that children probably do not have financial accounts opened in their name already. This makes the hacker’s job easier because it is harder to detect it.

How do you become a victim of identity theft?

• Data breaches. You have seen at the beginning of the article that the company Equifax had a data breach that leaked sensitive information of millions
• Malware. For example, spywares are built to gather information about you from your computer
• Phishing. If you fall victim to phishing and end up giving away your data to spoofed emails or “urgent” messages, your identity may be stolen
• Dark Web Sales. Believe it or not, your personal information may be sold to other parties. Just like a bag of tomatoes, but it’s your entire life.

What are Identity Theft Protection and Monitoring services?

• What services are out there?
• Why they won’t cut it
• Other measures you should take to protect your identity

Identity Theft services are designed to alert you when they find traces of you and your identity on the Internet.

Such services can offer Identity Monitoring, Credit Monitoring, Identity Protection, Identity Insurance.

In essence, if you have Identity Monitoring, your personal information is checked against various databases and websites, including those on the Dark Web.

What services are out there?

We will look at some of the Identity Theft services available and compare them.

Tool	Pricing	PROs	CONs
Identity Guard	$80-$200/year	-uses Artificial Intelligence when scanning articles -provides Safe Browsing	-base program doesn’t include credit monitoring -no free trial period
Identity Force	$99.9-$179.9/year	-has a wide selection of places to look for identity theft -has a phone application that also monitors your phone -30 days trial period	-base program doesn’t include credit monitoring
LifeLock	$99-$299/year	-$25,000 - $1 million insurance -base program includes credit monitoring -60 days trial period	-generally more expensive
ID Watchdog	$14.95-$21.95/month	-$1 million identity theft insurance	-you are only protected if you are an active customer -base program doesn’t include credit monitoring -no free trial period

In the image below, you can see three examples of alerts taken from three different vendors. The first one incorporates two alerts in the Identity Guard phone application; the second one is a screenshot of the LifeLock application with an alert regarding a Mortgage application, and the third one is from IdentityForce and shows a credit card transaction.

 Image source – identityguard.com

Image source – lifelock.com

 Image source - identityforce.com

The services I have presented are among the most popular and most used. If you want to use an Identity Theft Protection service, you should take into consideration your budget and the company’s plans and make sure it fits your needs.

The good thing is that most of these plans do provide a free trial period, so make sure to check that out.

Why they won't cut it

The problem with these services is that they basically cannot prevent a successful identity theft attack against you. They only help you find out if you have become a victim already.

Whether you become the victim of identity theft is partially up to you - as explained in the previous chapter, you always have to be on the lookout for phishing emails and other threats.

Keep reading to find out how to protect yourself without getting Identity Theft services plans (or at least to complete them).

Now, I'm not saying you shouldn't get such a service. If you consider you are at high risk or you just want to be sure you have some kind of backup plan doing a part of the work for you, you should get a plan.

These services will give you alerts whenever they detect something suspicious. However, you should be aware that such services do not, generally, for example:

• Alert you that someone withdrew money from your account, even though it wasn't you
• Alert you that your medical benefits were used

Other measures you should take to protect your identity

Here are some good practices that you should follow to avoid becoming a victim of Identity Theft.

1. Keep important documents that contain sensitive information safe.
2. Use secure passwords, change them regularly, and don’t repeat them across multiple websites.
3. Check your bank accounts, bills, cards regularly to make sure there are no new accounts you don’t know about or missing money.
4. Be suspicious when people ask for your information. Why do they need your Social Security Number or your address?
5. Make sure you’re receiving important emails or bills. If not, a hacker might be getting them instead of you
6. Check your credit reports and make sure that you’re not missing anything.
7. Use secure websites that use HTTPS and SSL certificates.

Infographic

I have prepared an infographic to summarize this article and once again accentuate how dangerous is an identity theft attack.

You can see some of the many forms it takes and a few measures that you should implement to be safe. The purpose is to understand that Identity Theft Monitoring and Protection services are not enough and should be accompanied by other actions.

Conclusion

Identity theft is a very dangerous type of attack. You can go years without knowing that someone is profiting off of you.

On top of that, you don't know what an attacker does with your data. They might be selling it to others on the Dark Web, which could lead to even worse consequences for you.

Identity theft services can be useful to detect some actions taken by hackers against you, but they should always be complemented by your protective measures because they are not enough.

You should:

• Stay vigilant and check accounts, bills, emails with a keen eye
• Don't fall for phishing attacks
• Use secure passwords

And others.

Have you ever used an Identity Theft Service? If so, please tell us how that worked for you.