Although it is important to take the proper steps in order to protect yourself from becoming the victim of identity theft, it is important that you do not become so frightened of the possibility that you do not allow yourself to take advantage of today’s modern conveniences. My father, for example, refuses to even log onto the Internet because he seems to believe that thieves will somehow be able to access all of his personal information as soon as he becomes wired – even if he never enters any of that information onto his computer.
The facts are that only 1.5% of Americans fall prey to identity thieves every year. While it is possible that you could be one of these unlucky few, it doesn’t mean you should lock yourself inside of a box in order to prevent it from happening. In addition, you must take care that your fear doesn’t allow you to become the victim of another scam – purchasing ID theft products and services that you don’t really need. Many of these products and services are not worth your while and, ironically, some of these offers are actually made by thieves looking to steal your identity.
One fact to keep in mind is that you generally are not going to be held liable for any losses incurred as the result of identity thieves. Therefore, purchasing fraud protection likely will not help you save money if you are a victim. According to the FTC, only 1/3 of those who discover the identity theft within the first five months actually have any out of pocket expenses. In addition, the average cost to consumers when a credit card account is opened in their names, which is the most serious form of identity theft, is $1,180.
As such, paying anywhere from $2 to $15 per month for identity theft insurance really isn’t worth it – particularly when considering that most of these policies have deductibles that are several hundred dollars and that some homeowner policies provide the same coverage. In addition, these policies don’t actually cover the cost of the money stolen from you. Rather, they help pick up the cost of mailing expenses, wages lost, and other areas where you may have lost money as a result of the theft.
Another scam is asking people to pay for their credit reports. While you should monitor your credit reports, you can get them for free every year by visiting www.annualcreditreport.com. Credit card insurance is also a waste of money as are credit-monitoring service. You can monitor your credit yourself and save the $155 per year it will cost you to pay someone else to do it for you.
In reality, the only identity theft deterrent you should purchase is a paper shredder. Use the shredder to destroy all mailings, bills, statements, and other paperwork that contains any sensitive information. Look for one that shreds the documents into confetti size pieces – the smaller the better, as it only takes a skilled thief about one hour to tape together a document that has been shredded into just ribbons.