Once Bitten Twice Shy: What is Credit Security Worth to You?
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Nora Dunn Anybody who has had their identity stolen is usually willing to pay good money to ensure it never happens again. Weeks upon weeks upon months of tiresome paperwork, changing bank accounts, switching automatic payments, and in some cases pleading a case for wrongly damaged credit is among the giant task list of nightmarish to-dos when you’re picking up the pieces after the fact.
So what is it worth to you to try and avoid this problem altogether? Obviously, exercising due caution is easy enough to do and prudent to say the least. Don’t use a credit card or do banking over an unsecured wireless network. Be careful with your bank card and entering in PIN numbers in public places. Avoid using the same password for everything that also happens to be the name of your pet.
In this day and age, most of these techniques are relatively commonplace. But what else can you do?
Credit Reporting and Monitoring Services
Most credit agencies like Equifax, Experian, and TransUnion have a credit reporting service you can subscribe to. For between $10 and $15 per month for example, the Equifax Credit Watch program will alert you to any changes in your credit such as:
- Somebody trying to open an account in your name
- Credit inquiries made on your accounts
- Changes in your account balance beyond user-set parameters
- Even $20,000 in Identity Theft Insurance
Experian and TransUnion have similar programs here and here. Most programs encompass monitoring of all three credit bureau activities, but before you race out and sign up it would be prudent to double check. Paying a monthly fee for a service that monitors only one third of your credit history is, well, only one third as good.
Initially, it seems like a good deal, worth considering – especially for those who were once bitten and now twice shy.
But upon further consideration, I begin to question the value in the name of frugality.
- Can I not hop online and check my credit balances daily (or every other day), scanning for erroneous charges?
- If somebody does a credit check on me I’d like to know, but what if instead of subscribing, I periodically order a free credit report? Each of the three credit agencies usually allow one free report per year: if I timed it right I could check my credit activity every four months.
- And although the Identity Theft insurance sounds handy, with a little bit of elbow grease, I shouldn’t have to pay any erroneous charges to my credit cards or account change fees once we’ve established the identity theft as the cause.
Then again…
There’s no denying the fact that simply paying the monthly fee could be easier, and may give you some more free time and well-deserved peace of mind.
Then again…
$10 here and $10 there, and you’ve blown your Latte Budget before even getting one drop of caffeine into your system.
So what is your credit security worth to you in this world of ever-increasing identity theft and credit crime? And what are you prepared to do about it?
Tagged: Personal Finance, credit card fraud, credit monitoring, credit reporting, credit score, Equifax, Experian, identity theft, TransUnion
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The DH and I just put a security freeze on our credit info with the three agencies. This prevents anyone from checking our credit, and makes it highly unlikely that anyone could open new accounts in our names, even if they had our social security numbers, etc. It did cost $10 per agency, per spouse, plus $24 to send everything by certified mail. But it will pay for itself over a $10 per month service in nine months. If we want to open a new account ourselves, or get credit approval for something, we can have the freeze lifted temporarily, again for a small fee. Since we're not planning to move, and we're paying cards down, not opening new ones, this works for us. Check it out at consumersunion.org/securityfreeze.htm
One of my business cards had an unauthorized purchase. The credit card company noticed it and called me. I asked the person who called how this happens. It said these people have software that continues to roll numbers until one works.
I use Zander's ID theft insurance based on Dave Ramsey's recommendation. What sold me on it is that they'll help with straightening out your accounts if your identity is stolen. It's $140/year for a family.
My attitude today is that no price is too high ... So you can guess that I'm bitten, not just shy.
Unfortunately, monthly or better monitoring of your credit reports is the only way to detect certain identity theft techniques. Freezes aren't binding on creditors. You can monitor your accounts 24-7 for unauthorized charges, and you will always miss unauthorized accounts. It doesn't matter who calls you to check on suspicious activity if you're not the one receiving your calls. Etc. Identity theft is not just some guy with a stolen credit card anymore. It stinks, its unfair, but its reality.
I put a fraud alert on my equifax. I got transunion and experian free reports. In 90 days, I will ask for another fraud alert and the process repeats. it's worth it. my ex has been saying i am responsible for his debts and i get calls saying i am listed as a relative!!!! We got divorced 20 years ago. whew...
Despite the constant barrage of articles concerning identity theft, it's actually a very rare crime. Only about 1.5 percent of all Americans fall victim to true identity theft, and half of those are victimized by family members or friends! We are far more likely to be burglarized or robbed.
I think it's important to distinquish between identity theft and the theft or misuse of a credit card. I recently had a new credit card -- which was erroneously sent to my home rather than my UPS Store box -- stolen from my mail box. The thief ran around town and charged up $1800. The bank quickly and easily resolved the problem with no expense for me. But that was NOT identity theft.
It's important to understand the difference because if you buy "identity theft" insurance you probably will NOT be covered for anything else (such as someone gaining access to your bank account or Paypal account and cleaning it out!).
Also, most credit card fraud actually doesn't end up costing the victim any money (although it may cause a lot of anquish). Banks usually don't even bother charging the $50 limit they are allowed to charge. So what are you actually insuring against?
As for the credit reporting -- all that does is alert you after the fact that something is wrong. It doesn't prevent it. And don't forget, we are all entitled to a free annual report from each of the three credit reporting companies.
I like the advice giving by Gregory Karp in his "Living Rich by Spending Smart" book (excellent tips, by the way!). He says to request ONE report (from one of the three) every four months. Since they all report pretty much the same stuff, you'll get free reports every four months.
For me, I'll skip the "insurance" and other fear-driven tactics and just use the money to pay for my private mail box and good dead bolt locks on my house!
I worry about someone getting my SSN and opening accounts in my name, but I know it's a pretty rare crime. I'm going to put a credit freeze in place, especially now that the state I live in (Georgia) passed one of the best laws in the country.
I'm not, however, too concerned with someone getting one of my account numbers. Credit card companies watch these accounts like a hawk, and most catch the activity before you do.
I had one card company call me within a few hours of making a $30 gas purchase (I hadn't used the card in months). My bank contacted me about a withdrawal from an ATM at an out-of-state airport minutes after I made it.
They don't want to lose money or a good customer, so they'll let you off the hook most of the time. Even if they don't, your liability is limited to $50 in most cases.
I ballance my check book weekly and get credit reports every six months (about). I don't have any special sort of security, but I find that being aware of my expenditures works just fine. When there's been a problem on my credit report, I simply write a letter with some documentation to the company that issued it and I is usually off very quickly (they only have 30 days to fix it by law). So far, no problems *grin*.
-Suz
Hi Nora, relating to this article, you can deny the request a merchant has to see further ID if the card is signed. This can also protect identity fraud.
but what bothers me further is the other things that merchants demand that we give into without realizing that it goes against our rights as card holders. According to Card Acceptance and Chargeback Management Guidelines for Visa Merchants, merchants can't force minimums (page 9), charge surcharges for using a card (page 10), or hold a estimated tip (page 11)(show card page 31). But they are still doing it! I'm interested in you opinion, as the woman who tries to charge everything; How do we protect ourselves against these charges? You can neither print or copy the PDF Visa has on their website that I cited. So what is one to do when faced with an angry merchant who is demanding you do what he says or leave without the goods.
http://www.mycardblog.com/2008/08/5-common-mistakes-a-merchant-will-make...
You can report the merchant who violates the agreement to VISA. They probably won't do anything about one complaint, but if VISA receives many complaints they can simply tell the merchant they aren't allowed to process card transactions. That is very effective because if the merchant violates that, they won't get paid from VISA for any card transactions, and it also means it won't show up on your bill. It's like it didn't happen, but you still have the goods.
I just had breakfast with a man who lost $3,000, taken from his atm. His best guess is that someone had shouldersurfed his pin number. he is going to the police station to file a report. I was with other people from AIG and Lehman - it's just a baddddd money morning.
thanks for letting me get this out.