In the wake of the security issues with many of the major retailers, the Wall Street Journal just published an article pointing out the security monitoring service may not be such a good investment. We’ve been saying this all along. Our reasoning isn’t limited to the fact that what the services offer to sell you you can can easily do for yourself – for free. It’s because of the cost of the service. And we’re talking about much more than the monthly charge. We’re talking about a much bigger price – your Constitutional rights!
Many of the so-called identity theft/credit monitoring programs are owned and/or operated by one of the “Big 3.” The very same billion dollar industry that profits from selling your information now wants to charge you ensure it’s reporting accurately? This doesn’t pass the smell test if you ask me.
The service, as a general rule, is just unnecessary. The very same things they are “helping” you with are mandated by federal law. If you want to prevent access to your reports by potential creditors, you may put a fraud alert on your consumer file. And it’s FREE. Simply doing so with one of the Big 3 will result in an alert being placed with each of them. And if you suspect identity theft and place a fraud alert on your credit file, you are entitled to two free reports from each bureau per year. If you feel your personal information may have been compromised, feel free to contact my office, we’re happy to give you some personalized (free) advice on steps you can take that fit your needs.
A notable drawback to a fraud alert is that if you want to access your own credit, this will slow you down. An alert will NOT prevent those with a permissible purpose to undertake a credit review from doing so. For e.g., your current creditors that hold open-ended accounts (e.g., most credit cards) may still review your credit information to determine if you still qualify for ongoing credit. Instead, a fraud alert will prevent NEW credit from being opened in your name. It is notable that several states have the option of a security freeze, which is governed by state law and is a bit different from a fraud alert.
An estimated one in four consumers have a substantial error on their report. This happens for a myriad of reasons, and your best bet to protect your good name is to monitor your own credit report yourself (for FREE).
Federal law requires each of the Big 3 to provide you a FREE copy of your report each year. Visit www.annualcreditreport.com for your FREE copy. If you don’t suspect errors or fraudulent activity, I suggest spacing them out to one every four months. IF you have visited one of the retailers in questions, or have concerns, pull them all right away. The Big 3 report slightly different things, but they are generally largely the same.
Also note, if you have been denied credit, federal law requires that the potential creditor notify you, in writing. This letter will tell you which credit bureau(s) were used in the credit decision. And that/those bureau(s) must provide you a FREE copy of your report.
One final note worth revisiting– the vast majority of the credit monitoring services, which again, are usually owned by one of the Big 3, have language to prevent you from suing the bureau in court if they violate the law. The fine print can come back to haunt you and strip you of your Constitutional rights.
And better news — if you have errors, in most scenarios there are seasoned consumer attorneys around the country (my office included – we offer representation to consumers throughout the country) that offer services to client wherein our fees are paid by the other side when you recover damages for your losses. Most victims of ID theft and credit reporting losses suffer significant damages and are entitled to compensation under federal law.
In conclusion, you do not need to pay the bureaus for something you can easily do yourself for FREE. We offer FREE credit report reviews if you have questions about how to read your report(s) and what to look for, we’re happy to help. Don’t throw your good money after bad.