Americans spend about $3.5 billion a year on identity theft protection services. But Consumer Reports says - save your money!
Thieves tried to use Lauren Mirsky's credit card on two different occasions, but each time they were thwarted - thanks to safeguards financial institutions have in place that are required by law
"The first time it happened," Mirsky said, "the credit-card company called me when they thought there was suspicious activity on the card. The second time, it was actually an airline that called me when they thought someone was purchasing a ticket using my card."
But many financial institutions and other companies are marketing identity-theft protection services you have to pay to get. Consumer Reports says while millions of people do fall victim - the rate of ID theft is actually declining.
"We found the companies often overstate the risk and puff up the power of their services," says Greg Daugherty, a Consumer Reports money adviser.
The companies promise to alert you to suspicious activity with "daily credit monitoring" and by "protecting personal information" including your Social Security number. But Consumer Reports has looked at nearly two dozen plans that cost $120 to $300 a year and says that you don't need to spend the money!
"It turns out you can do much of this monitoring yourself for little or no cost," according to Daugherty.
"Next put a security freeze on your file with the same credit agencies," advises Daugherty. "That blocks access to your credit report and makes it more difficult for a crook to get new credit in your name."
Also, be sure to sign up for free alerts from your credit card issuer so it'll red flag unusual charges. Plus, always check your statements for unauthorized purchases.