When a hacker or bad actor gets your personal information and uses that information to commit fraud, steal money, or sell your information on the dark web, you become a victim of identity theft. Identity theft protection plans are paid services that can help protect against identity theft and the negative damage it can have on your personal life and financial security.
It's important to highlight that identity theft protection plans help mitigate downstream issues that happen once potential identity theft is uncovered. Certain features such as data monitoring and stolen fund recovery help make the cost of identity theft coverage worthwhile.
Investing in an Identity Theft Protection Plan Works
Identity theft can be very detrimental if left unchecked. If people are unaware that they are victims of identity theft, identity thieves have more time to do damage. The damage from identity theft can lead to stolen funds, negatively impacted credit scores, debts taken out in your name, lawsuits, and in cases of medical identity theft, fraudulent health information could be added to your medical records.
The damage from identity theft can result in legal issues, long-standing personal implications, and even financial ruin. Paying for an identity theft protection plan can help protect your life from the negative impacts that come with this type of fraud, and even though there is a cost associated with identity theft services, that cost pales in comparison to the costs associated with identity theft recovery when it gets out of hand.
How Identity Theft Happens
It’s important to remember that anyone can become a victim of identity theft; it can occur due to poor data security practices, but it can also happen through data breaches, public Wi-Fi networks, and more. If you experience identity theft, it doesn’t mean that you have done anything wrong. Identity thieves are savvy – they dedicate their lives to these schemes. With key personal information, identity thieves can commit ID theft. This information includes, but is not limited to:
Social Security Number (SSN)
Full Name
Date of Birth
Home Address
Email Address
Phone Number
Driver’s License Number
Passport Number
Credit Card Information
Bank Account Details
Login Credentials
Medical Insurance Information
Tax Information
Employment Details
Security Questions and Answers
Account PIN Numbers
In fact, you can check if your email has been involved in a data breach here, to give you an upfront idea of how your data may be compromised.
Once a bad actor gets ahold of even one of the pieces of information above, they can sell that information on the dark web, hack into your accounts to collect more information, take out credit cards in your name, and more. Depending on what a hacker’s goal is, their approach to stealing your identity may vary, but some tactics to watch out for are:
Fraudsters send emails, text messages, or make phone calls posing as legitimate entities to trick individuals into revealing personal information such as social security numbers, passwords, or credit card details.
Data Breaches
By infiltrating the databases of companies or institutions, hackers can steal large amounts of personal information from thousands of users.
Document Theft
Going through your trash bin to collect bills, bank statements, or other personal information is less common today, but it still happens.
Social Engineering
Especially with the rise of deepfakes and Artificial Intelligence, hackers can make phone calls posing as family members, banks, or other authority figures to collect personal information from their victims. Social engineering can also happen via email or in person.
How Identity Theft Protection Services Work
So, how do identity theft protection services actually work? While these services can’t prevent identity theft in every situation, they are built to flag risks early and provide protection from identity theft-related damage. Key features that identity theft protection companies offer are:
Personal Information Monitoring
Identity theft protection companies continuously search the dark web, public records, data breaches, and other platforms where your personal identifying information (PII) may be found. If your information appears in any of those places, identity theft protection will alert you, allowing you to take the next steps to secure your data and information.
Identity Recovery Support
Some of the more expansive identity theft protection policies offer recovery support to their clients. This coverage will connect you with a dedicated support agent who can make calls, freeze your accounts, and take on the brunt of re-securing your personal information and limiting the impact of identity theft.
Credit Monitoring
By monitoring reports from the major credit bureaus such as Equifax, Experian, and TransUnion, identity theft services can see when new credit applications show up in your name. If you aren’t the person behind those applications or inquiries, this service will help you lock down your credit from identity thieves.
Identity Theft Insurance
Perhaps one of the most valuable components of ID theft protection is identity theft insurance. This insurance policy will kick in if you experience financial losses associated with identity fraud and help you cover expenses related to restoring your identity.
What to Do When ID Theft Occurs
Whether or not you have an identity theft protection plan, reacting swiftly in instances of identity theft is key. If you do have a protection plan, get in touch with your provider immediately and have them guide you through the next steps. If you’re trying to navigate it on your own, prioritize the following:
Freeze your credit files at all major credit bureaus. This restricts identity thieves from being able to open new credit accounts in your name without impacting current credit accounts that are open.
Contact the Federal Trade Commission and local authorities to report the fraud. They can help you map out the next steps.
Check your credit reports for any unauthorized activity.
Another component of protecting your identity is taking preventative measures regarding data hygiene, financial practices, and personal security. Maintain strong passwords, monitor your financial accounts closely, and never give information to a third party unless you are 100% certain they are secure.
Summary
Identity theft occurs when someone uses your personal information to commit fraud, and identity theft protection plans help mitigate the damage. These plans monitor data, alert you to suspicious activity, and assist with recovery, making them invaluable.
Identity thieves can obtain your information through various methods such as phishing, data breaches, document theft, and social engineering.
Identity theft protection services offer features like personal information monitoring, identity recovery support, credit monitoring, and identity theft insurance. These services help detect early risks and provide support to limit the impact of identity theft.
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