Friday, February 6, 2009

Credit Monitoring Services Don't Guarantee Protection

Recent security breaches - affecting millions of credit card users - have sparked renewed interest in credit-monitoring services, but experts warn that some companies use questionable marketing methods to get you to sign contracts laden with loopholes (SmartMoney.com Jan. 23).

Credit monitoring services may carry a hefty price tag--in some cases $180 a year or more. But despite the promises, the service providers can't guarantee that your credit or your identity will be protected, and they don't do anything that you can't do yourself.

If you're thinking of purchasing a credit-monitoring service, make your decision based on the facts:

  • Know what will be - or won't be - reimbursed. Many services include identity theft insurance or sell it as an add-on. That so-called insurance entitles you to reimbursement for costs associated with cleaning up your credit--possibly some phone expenses or overnight packages--but it doesn't cover any money a thief takes from your savings or checking account.
  • Ask whether the service pulls reports from all three credit bureaus. A promise to "guard your identity" may give you a false sense of security if the service only offers credit reports from just one of the three credit bureaus. You'll still need to be vigilant or you may miss suspicious activity.
  • Read the fine print. When activating a credit card or cashing a rewards check from a credit card company, you unwittingly may be agreeing to sign up for a credit-monitoring service.

Finally, don't fall for just any free credit report offer. The report at FreeCreditReport.com isn't free. If you don't cancel before a free trial period is up, you'll be billed a monthly fee. If you forget, canceling the service after the trial period can cost you time and money. The only truly free credit report is available at annualcreditreport.com; federal law gives you the right to order one free credit report every year--from Experian, Equifax, and TransUnion--through this website or by calling 877-322-8228.

source - cuna.org

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