Identity theft protection

Paid services that monitor for misuse of personal information, alert the user and help restore their identity after fraud.

What it means

Identity theft protection services typically watch credit reports for new accounts, scan online marketplaces for leaked personal data, track public records and changes of address and send alerts when something looks suspicious. Many also offer recovery specialists who help undo fraud and an insurance benefit that reimburses certain recovery costs.

These services mostly detect problems after they happen rather than prevent them. Several of the strongest protections are free: a credit freeze at each of the three major credit bureaus is free under federal law and blocks most new credit accounts, fraud alerts are free and free credit reports are available. Some banks, card issuers and employers include monitoring at no extra cost, and breach notices often come with a free trial.

Example

For example, a plan costing $15 a month adds up to $180 a year. A person could compare that to freezing their credit at all three bureaus for free and checking their free credit reports regularly.

How it’s used

After a data breach exposes a Social Security number
Recovering from identity theft that has already occurred
Monitoring the identities of children or older relatives

Strengths and weaknesses

Strengths

Alerts can catch fraud sooner
Recovery help saves time after a theft
Bundles monitoring that would otherwise take effort to do alone

Weaknesses

Ongoing monthly or annual fees
Mostly detects rather than prevents identity theft
Much of the core protection is available free elsewhere

Good to know

Checking what coverage an employer, bank or card already provides can avoid paying twice.

Educational information only, not financial, tax or legal advice. Rules, limits and rates change; check the IRS, your lender or plan, or a qualified professional before acting.