Certified Identity Theft Risk Management
Specialist - CITRMS® XV is a registered
trademark of the Institute of Consumer Financial Education (ICFE), San Diego,
Certified Identity Theft Risk Management Specialist - CITRMS®
ICFE Certified Identity Theft Risk Management Specialist - CITRMS® XV
Caution Consumers to Scrutinize Identity Theft Services
Because they are not always what you thought you paid for
San Diego, CA – Massive data breaches, just in the first half of
2015, have involved millions and millions of innocent and unsuspecting
consumers. These incidents are drawing significant national attention to
the crime epidemic of Identity Theft. Consumers nationwide are now being
bombarded with offers for credit monitoring, identity theft insurance,
identity theft protection, and a host of related fee-based services.
Certified Identity Theft Risk Management Specialist - CITRMS® XV who
are certified by San Diego based Institute of Consumer Financial
Education (ICFE), cautions consumers to carefully review and understand
the limitations of any service offered in conjunction with identity
theft. This is a must-do in order to make an informed buying decision
without regard to any marketing spin.
Most of these services require an
ongoing monthly service fee to perform tasks that an informed consumer
can and should easily do him or herself generally at little, if any,
cost. Many ID theft services companies actually claim, without
explaining how, their service protects or even guarantees against
identity theft. This is a marketing claim proven wrong time and time
again and also one that is clearly disputed by privacy experts and
consumer advocates alike.
The ICFE believes that consumers need
to have the facts regarding such services, and make informed decisions
as to how they can manage and reduce their own risk of becoming a victim
of identity theft. The ICFE reviewed the many areas where consumers may
be misinformed of all the facts as a result of marketing spin.
Credit Monitoring Services
- Most credit
monitoring services only monitor one bureau. Some services provide an
initial three-bureau report on the first order, and then revert to
monitoring only one. Consumers should carefully read the fine print
before signing up. While major accounts such as home and auto loans are
typically reported to all three bureaus, non-major account creditors
often report to only one bureau. If the service only monitors one
bureau, it will show only what is reported to that bureau and may miss
anything and everything else.
- Many creditors report to the
bureaus only once per month or quarter, and credit bureaus only report
what is reported to them. Expensive daily or weekly monitoring may
provide early notice of inquiries, but many potential credit grantors
regularly make inquiries for pre-approved offers, and inquiries often
are not differentiated or explained. If an account is opened, it may
still be some time before it is reported. In cases involving in-store or
utility accounts, the account may never be reported until after it has
been sent to collections.
- With very rare exceptions, credit
monitoring does not monitor specialty-reporting companies, such as
ChoicePoint, or check verification companies.
- Credit monitoring
will not alert the consumer if someone has obtained a driver s license,
birth certificate, Social Security card, or other such documents in
their name. It also will not alert the consumer if someone has used
their name during interactions with law enforcement, resulting in arrest
warrants or erroneous criminal records.
- Credit monitoring will
not report to the victim in a timely fashion, if at all, when an
identity thief has taken a job using the victim's name and Social
Security number -- in some States, this type of employment fraud
approaches one-third of all identity theft cases, and causes significant
financial cost, inconvenience, and embarrassment to the victim.
Conclusion: Credit monitoring may be useful to alert the consumer that
an account has been opened in his or her name, but afterwards the task
of disputing the accounts and resolving the matter still falls squarely
on the consumer s shoulders. In most cases, experts contend that
consumers may be far better off ordering their reports themselves, and
staggering their requests throughout the year. FACTA-mandated free
reports are available in all fifty states. If the consumer is a victim
of fraud, or has been denied credit due to information on their credit
report, he or she can also obtain a copy of their report for free.
Other options available to consumers include opting-out of
pre-screened credit offers, Fraud Alerts , and credit Freezes .
Fraud alerts are statements that may be included in the consumer s
credit report intended to alert potential credit issuers that the
consumer is or may be a victim of fraud. A fraud alert is temporary, 90
days in length; it may be extended, however, with the consumer s written
request, for up to seven years. Fraud alerts are sometimes completely
ignored, but an alert can stop many instant credit applications. The
alert should include a request for potential credit grantors to contact
the consumer directly at a specified number to confirm the legitimacy of
the application before any granting of credit.
freezes, now available to any consumer. Credit freezes are a powerful
tool that essentially prevent third parties from accessing the consumer
s credit file, until he or she instructs the credit bureaus to unfreeze
or "thaw" the report. This request can be general or only for specific
companies. To be effective, the consumer should place a freeze on their
file at each of the three bureaus. For non-victims, there is typically a
small charge imposed by the bureaus for each freeze and thaw action.
Identity Theft Insurance
- Insurance in this case is a bit of
a misnomer, and is often presented in a manner that may give consumers a
false sense of security. Though it may offer reimbursement of certain
expenses, Identity Theft insurance cannot protect a consumer from
falling victim to the crime, and the fine print typically imposes
substantial restrictions on what expenses may be eligible for
- Significant expenses, such as legal fees or time
lost from work, often require pre-approval. In many cases, the services
of an attorney are not required, though this is often presented as a key
component of a policy.
- Identity theft "insurance" in most cases
does not cover financial losses from identity theft, only out-of-pocket
expenses and limited "lost work time" of the victim.
policies have a significant deductible, such as $500 or more. This means
that in many cases, the policyholder bears all of the expense despite
having paid the premiums for insurance .
- Identity Theft
insurance may reimburse or offset some of the costs of resolving the
incident, but in most cases it does not reduce the time and hassle of
the work required by the victim to resolve the incident.
deductible is zero, or very low for those policies providing
reimbursement for time lost from work, then the insurance may be worth a
premium of $25 to $45 annually. Consumers should read the fine print
very carefully, however, and pay close attention to exclusions,
restrictions, and claims requirements before signing up.
Identity Theft Protection Services
- Many companies offer
Identity Theft protection and resolution services for an ongoing fee. As
recent events and data breaches make abundantly clear, it is impossible
for any ID theft service to prevent Identity Theft. At best, a consumer
can take reasonable precautions within their own control to reduce or
minimize their risk. However, in an information-based society where
countless organizations and persons have access to confidential consumer
personal and financial information, consumers may easily fall victim
through no fault of their own, other than having done business with a
- "Protection" and "Restoration"
Services often have substantial exceptions in the "small print" that
carve out significant incidents, such as where a family member of the
victim is the perpetrator or even knew of the identity theft incident.
- These companies charge fees to perform the task of cleaning up
credit report issues related to the incident on behalf of the victim.
Services typically range from $120 to over $200 if the customer is
enrolled before an incident happens. For those consumers that engage
these services after falling victim, if permitted at all, the costs
often range from $500 to $2500.
- These services involve tasks
an informed consumer can easily do themselves, such as writing letters,
making telephone calls, and disputing charges. In many cases, despite
the fees involved, the consumer must still do these items themselves. In
order to perform these services on behalf of the consumer, the companies
generally require a limited power of attorney in order to be able to act
on the victim s behalf. Regardless, many creditors may still require
communication directly with the consumer, rather than though a third
- The vast majority of these services are limited
strictly to matters of standard financial accounts, leaving the victim
to struggle through resolving liens and judgments, clearing erroneous
criminal records, duplicate licenses, and countless other non-financial
account matters. Often a simple kit is provided which consists of a few
generic form letters and a simple one page contact sheet.
many cases, identity thieves do not simply use their victim’s
information and then throw it away. Thieves sell and trade this
information with other thieves. This means that once the initial
incident is resolved the victim can be, and often is, re-victimized in
the future. A new incident means a new case and new fees.
Identity Theft Risk Management
A scam artist’s worst enemy is the
informed consumer. With the help of an ICFE Certified Identity Theft
Risk Management Specialist - CITRMS® XV, the consumer education they
make available is is the best way to minimize risk of identity theft.
Many consumers have little idea just how incredibly simple and easy it
is for thieves to steal their credit information and identity.
Good record keeping and a commonsense approach to destroying personal
information before discarding will go a long way. The preferred method
of prevention, however, is education combined with guided assistance in
using the appropriate risk management tool.
Free resources are
available to assist in learning and understanding of their rights, and
in resolving their incident. They include non-profit consumer
organizations such as the Identity Theft Resource Center
(www.idtheftcenter.org), The Privacy Rights Clearinghouse
(www.privacyrights.org) and the Consumer Financial Protection Bureau
(CFPB.gov) and the Federal Trade Commission (www.ftc.gov).
Conclusion: Informed consumers can reduce their own risk and resolve
their own Identity Theft incident without incurring ongoing monthly fees
or signing up for expensive and limited convenience services.