We've all heard of identity theft. Maybe you or someone you know has even been a victim.
There are companies that offer to guard against I.D. theft. Consumer Reports explains how the coverage works and one simple step you can take to minimize your risk.
Andrea Ferrero's identity was stolen a few years ago, but she was lucky. She had enrolled in an I.D. theft protection service, which quickly informed her someone had gotten a large amount of credit in her name.
"They walked me through the steps to take to dispute the line of credit that had been opened and take care of that," she explained.
But before you enroll in one of these services, Consumer Reports said know what you're getting. Some people assume these companies will prevent identity theft, but that's not exactly true.
"Consumers pretty much have to accept that criminals can get their hands on your personal information no matter what you do. The key is to spot fraudulent activity quickly and then do what you have to do to stop it," said Margot Gilman, Consumer Reports Money Editor.
I.D. theft protection services like Ferrero's can alert you in a timely manner and help you dispute fraudulent transactions after your identity has been stolen. Typically the fee is $10 to $30 a month.
But the best way to avoid being a victim of is to freeze your credit with the major credit bureaus: Equifax, Experian and Transunion. It's free and no one will be able to open credit, including you, until you unfreeze it.
However, even then a criminal can still use your personal information to get medical services or to steal your tax refund.
"It's critical that consumers themselves keep a careful eye on their financial world -- bank and credit card statements obviously, but also medical records, insurance records, tax records," said Gilman.
If you're considering I.D. theft protection, ask a lot of questions. Some companies cover very little or just hand you a "do it yourself" credit repair checklist.
And whether you pay for protection or not, check your credit report for free once a year with the three credit bureaus to spot any suspicious activity.
Consumer Reports: Protecting yourself from identity theft