The odds that you’ll have your identity stolen are around 1 in 15 during a given year. I’m going to share with you the best way to protect yourself from identity theft at the lowest cost to you, plus where to get credit monitoring for free.
It’s Not LifeLock
You have probably heard of LifeLock. Now hold on – I am not trying to sell you LifeLock.
LifeLock is a big advertiser on the radio and the web. But they are in the news again and not for a good reason.
LifeLock agreed to pay $12 million in March of 2010 as part of a settlement with the Federal Trade Commission and 35 states. Lifelock was accused of misrepresenting the amount of protection provided for customers and settled the case. As part of the settlement, Lifelock agreed to change some of its business practices and not make false claims in its advertising.
But now LifeLock is accused of violating the settlement agreement.
The FTC alleges LifeLock is still making false advertising claims. LifeLock claims the data you’re paying to have protected is receiving the same level of protection as that provided by financial institutions.
They also advertise you will receive an alert as soon as LifeLock detects a problem, but their website specifies no timeframe for you receiving an alert. Another issue the FTC alleges is LifeLock still doesn’t have a plan in place to protect your sensitive data, and they didn’t keep records they had agreed to maintain.
What credit monitoring services are costing you
LifeLock’s standard plan is $120 a year while the top plan is $360 a year.
Note I didn’t share with you the monthly rate you’ll see advertised on their website. To master your finances we need to consider the total costs, not what can I afford each month.
The top three credit bureaus – Equifax, TransUnion, and Experian have their own identity protection plans as well.
Some credit card companies sell this stuff too. Amex has a credit monitoring through their CreditSecure service for $14.99 a month.
And of course, there are radio talk show hosts that are receiving payments, endorsement deals, etc., for promoting other identity theft protection services.
How you can get more protection for less money
The cheaper and superior alternative to credit monitoring and alert services is called a credit freeze.
A credit freeze – or a security freeze as it’s sometimes called – lets you restrict access to your credit report. Creditors want to pull your credit report before issuing you a credit card, a car loan, or a mortgage.
If a creditor can’t see your credit report, they aren’t going to extend you credit.
Or more importantly – they won’t extend credit to someone pretending to be you. It stops the thieves like none of these other services can.
How much does a credit freeze cost?
- You must do a credit freeze at all three – that’s important.
- The freeze is permanent until you lift it.
It’s $5-$10 at each reporting company one time. Not every year or every month.
Compare to $75, $120, or $350 per year.
What if I need to apply for credit or a service?
When you need credit, such as when you’re:
- opening a new bank account
- changing cell phone carriers
- applying for a loan
- applying for a new credit card
you can temporarily thaw your credit for an additional $5-$10.
But again, it’s so much cheaper than paying for a monthly service that only notifies you after someone has stolen your identity.
Where can you get free credit monitoring?
If you still want credit monitoring, you can get it for free through CreditKarma.com. CreditKarma not only gives you free credit reports and monitoring, but you can also get your credit score for free as well.
Paid-for monitoring services are more expensive than the alternatives and provide less protection.
Just ask yourself:
Why are these companies being taken to court by the FTC?
I want you to save more of your money, and have more protection at the same time.
How you can protect yourself from identity theft
Take these action items today to help prevent someone from stealing your identity:
- Visit each credit bureau and put a permanent credit freeze on your credit file
- Sign up for CreditKarma to get credit monitoring for free.
I’ve had a credit freeze for fifteen years – so far, so secure! Consider doing it to protect yourself and your family.