Having your identity stolen can be crippling. Identity theft can wreak havoc on your financial situation, as thieves are able to ruin your credit score and even claim money that you’re entitled to.
An top of that, knowing that someone else has your personal information takes an emotional toll. Many victims of identity theft report feeling anxious or stressed, even years after the fact.
While it’s impossible to completely prevent identity theft, signing up for the best identity theft protection can help. Identity theft protection services proactively monitor the web and financial databases to alert you as soon as there’s suspicious activity in your name. In addition, these services can make the process of recovering from identity theft much easier.
In this guide, we’ll explain everything you need to know about what identity theft protection services do to help secure your identity.
Protection, not prevention
Before we dive into the many things that identity theft protection services do, it’s important to understand that no company can prevent identity theft from happening.
Most of the services that identity theft protection companies offer are reactive. They’ll monitor and issue alerts once there’s suspicious activity in your name, but they can’t stop your information from falling into the wrong hands in the first place.
Some identity theft companies offer security tools like password managers and virtual private networks (VPNs). These can be useful in reducing your exposure to cyberthieves who are out to steal your identity.
However, even the best security tools can’t protect you completely. Many of the details needed to copy your identity are public, and all too often, the leak comes not from you, but from a company that you entrusted with your information.
Identity theft can happen to anyone at any time. The goal of identity theft protection services is to minimize the damage and help you recover.
Dark web monitoring
The number one thing that identity theft protection services do is watch and wait. If your personal information appears somewhere it shouldn’t be, it will be flagged right away.
One of the most common places personal information shows up is on the dark web. This is an anonymous region of the internet where identity thieves often lurk and try to sell stolen personal information. Identity theft protection services will comb through the personal information that’s for sale and issue an alert if your name, email, or financial information turns up.
However, be aware that these companies are powerless to take your personal information off the dark web. Once it’s been stolen, it’s stolen forever. The most that identity theft protection services can do is let you know when your information turns up somewhere new.
Credit score monitoring
Another thing that identity theft protection services are constantly monitoring is your credit report. If someone opens a credit card in your name, it will show up in your credit report almost immediately. Spotting suspicious credit activity right away can potentially stop a thief from going on a spending spree in your name.
Importantly, identity theft protection services monitor all three of the major credit bureaus. This is critical, since the bureaus differ in what they report, and suspicious activity may turn up in one agency’s credit report long before the other two register it.
One thing identity theft protection services can’t do, however, is freeze your credit so that no one can open a new financial account in your name. Instead, this is one of the best steps you can take to protect yourself against identity theft. As soon as you are notified of suspicious activity, you’ll need to contact the credit bureaus yourself to enact a credit freeze.
Monitoring local registries
Many identity theft protection companies will also routinely check local, non-financial registries to ensure that there’s no unusual activity happening in your name. For example, these services will monitor medical databases to ensure that no one is using your identity to get medical services.
They can also check county-level arrest records to ensure that someone isn’t arrested under your name, potentially putting you in legal trouble. Still, don’t expect identity theft protection services to be infallible at this type of monitoring. There are simply too many disconnected databases for them to keep track of—every hospital network, county court system, and state Department of Motor Vehicles (DMV) has its own database to monitor.
So, even if you sign up for identity theft protection, you’ll still need to be aware of how you’re sharing your personal information, and keep an eye out for unusual activity in your accounts.
Recovering from identity theft can be a long and grueling process. Among other things, you may have to file an application with your bank to restore stolen funds, wrangle credit bureaus to amend your credit report, and go back and forth with credit card companies to cancel fraudulent cards and charges.
Doing all of this takes a lot of time and effort. Thankfully, many identity theft protection services also offer recovery support. Depending on what service you choose, your provider may take charge of the whole process. Some companies will ask you to sign a power of attorney at the start of your recovery, so that they can work with banks and other agencies on your behalf. In addition, you may get a recovery specialist who is dedicated to your account.
Some companies even offer what’s known as lost wallet protection. If you lose your wallet, the company will take over the process of canceling all your credit cards and arranging for new ones to be sent to you.
However, not all identity theft protection services offer quite that level of support. Some only cover certain types of identity theft, such as credit card fraud, and others have do-it-yourself kits to walk you through the recovery process. Be sure to check what kind of recovery support is included before signing up for an identity theft protection service.
Identity theft insurance
Another important thing that some identity theft protection services offer is an insurance policy. If your identity is stolen, a protection provider could offer up to $1 million in reimbursement for stolen funds and other recovery costs. Depending on your situation, having this insurance policy available can be a lifesaver.
However, keep in mind that funds taken fraudulently from your bank accounts are typically covered by Federal Deposit Insurance Corporation (FDIC) insurance, and most credit card companies will refund charges made with a fraudulently procured card. So you might not need this kind of reimbursement, even if at first it looks like you’ve lost a lot of money as a result of identity theft.
Having your identity stolen can be devastating. Thankfully, identity theft protection services can minimize the damage and help you through the recovery process. A big part of what identity theft services do is simply to monitor for suspicious activity. The sooner you know that something is amiss, the sooner you can respond and recover your identity.
That said, be aware that identity theft protection services can’t completely prevent identity theft and they’re not infallible. You will still need to play an active role in monitoring your accounts and keeping your personal information safe.