OK … I’ve had ID Theft insurance for the past few years and I’m seriously considering dropping it as it’s $140 a year and, well, I can think of other things I’d like to do with that money.
For those unfamiliar, this insurance doesn’t prevent the ID Theft but it means that if it happens the insurance company will deal with it. They’ll deal with the police and make all the phone calls that are necessary to clean it up and get your credit straightened out. Or, so it says on the policy anyway…
Does anyone have any experience on this topic, good or bad? If it does happen to me or my wife, how hard is it to clean up? Is it worth having this insurance in my back pocket or am I wasting my money?
Since I had no idea that such a thing existed my vote is clearly in the “waste of money”-camp.
Isn’t the completely sound based on statistic advice, that you should never insure against anything that won’t cripple you financially? In other words, insure your house, your expensive car (but not the used clunker), yourself against liability and your health.
But not your tv, iPod, identity etc.
What you need to do is tell the credit reporting agencies to flag your account. Here’s a page with all the info necessary. I can’t tell you that you don’t need the insurance, but only 5% of people using credit get caught in an identity theft situation and many times it is simply a stolen credit card. While most people would not think of stolen credit cards as identity theft, technically it is, and that’s what makes up the bulk of ‘stolen identities’. Without including credit card theft, the chances of having your identify stolen go down to less than 1%. And even those chances are shrinking rapidly, as credit checking methods are improving.
I made a game purchase of $50 online and another at an online store of like $150 one day several months ago. Within an hour, I got a call from a Bank of America automated service asking me to confirm those purchases as they were outside of some sort of purchasing pattern they had formulated for me, I assume.
I think credit card companies are on top of this even though they do try to constantly sell me “credit protection services”. I view it as an add on service, which gives you little value, but is like bonus money for credit card companies. Much like most warranty extensions for products purchased, IMO.
Yeah, both my wife and I have had our credit cards used fraudulently and both time the bank (different banks) notified us immediately, reversed the charges and all we had to do was complete a form and send it back.
I’m inclined to think they are a waste of money since most banks are pretty diligent about CC fraud and that, as Lorini noted, is most of what these policies are trying to insure against.
Mostly what those services do is automate the process of having your ID flagged with the credit bureaus as a potential target for fraud. I used to do the paperwork to open lines of credit for people at the furniture store I worked at, and this was the big difference I saw.
If someone did not have themselves flagged: I would enter the information they gave me on the paperwork for the credit account, take a photocopy of their drivers license, and wait for the bank to fax me a sheet with their new account number and their credit limit.
If someone was flagged: I would enter the information they gave me on the paperwork for the credit account, fax the bank a photocopy of their drivers license, wait 15 minutes, call the bank, read them the drivers license number and verify that the picture matches the person standing in front of me, then give the phone to the customer so they can answer questions about previous addresses they’ve lived at, mothers maiden name, etc. Then wait for a fax with the customer’s new account number and credit limit.
