Given the frequency and scale of cyberattacks affecting U.S. companies, it's likely your information has been or will be caught up in a data breach. And as we've seen in the past, companies that have experienced breaches usually offer their customers some sort of free credit monitoring or identity theft protection plan to help deal with the aftermath. If you've been involved in multiple breaches, then you may have received multiple offers for free credit monitoring from different companies which provide the service. But which ones should you sign up for, and how do the different plans compare to one another?
"You need to read what you're actually being offered," said Adam Levin, identity theft expert and chairman and co-founder of Credit.com. "In some of these offers, they're kind of vague, so you need to say, 'What am I actually getting, and how do I sign up for whatever it is?'"
Some people opt into all of the plans they are offered — they may have different coverage periods, and different services are offered by different plans. Others may prefer to keep things simple and choose only one. Regardless of your choice, here are a few things to consider when reviewing your options.
What Data Does the Service Monitor?
Most consumer credit data (in addition to public records and other consumer information) are reported to the three major credit reporting agencies: Equifax, Experian and TransUnion. Some credit monitoring services review what's happening on all three credit reports, and some offer only single-bureau monitoring. Because data varies among agencies, three-bureau monitoring is more valuable.
Monitoring services have several levels of detail, and the more closely your data is analyzed, the more helpful it is likely to be to you.
Some monitoring services review summaries of your credit report, which are known in the industry as "header files."
"It would be the same as looking through the table of contents instead of reading the book," said Michael Bruemmer, vice president of consumer protection for Experian. Experian's ProtectMyID products have been offered by some companies that experienced data breaches, including Target and Premera.
Header file monitoring means a consumer would be notified if there was a change in the number of accounts on the person's credit report, if there have been new inquiries or if debt levels have increased. A credit monitoring service may or may not include checking for changes in all aspects of a report.
"In some cases the monitoring is only looking for maybe new credit openings," Bruemmer said. "It may not look at inquiries, it may not look at public records, it may not look at account takeover actions."
Who Does It Serve?
A more complicated aspect of credit monitoring has come into play in the wake of the data breaches of health insurers Premera and Anthem — child identity theft. Millions of minors' personally identifying information was exposed in the breaches, which can be used to open fraudulent credit accounts, among other things.
"The process that we use, which is a patented process, looks for the creation of a credit file," Bruemmer said. "When we sign up and we protect a child, we're looking for the creation of a file, and then we'll notify the guardian or the parent. … In most cases it's a sure sign of identity theft."
Child credit monitoring processes vary, just like they do for adults. Find out what fraud indicators a product looks for and how you will be alerted to them. Additionally, some monitoring services go beyond the credit report and check public records databases. Some regularly scan the Internet for signs that your personal information has been abused. There are so many possibilities, so you want to look at the details of your offer and find out exactly what you're getting for free, and for how long. When you're comparing your options, it probably makes sense to focus on the service that gives you more.
What's the Timeline?
Fraud can happen at any time, which is why constant monitoring is best. Find out how often the credit monitoring reviews your information for changes — whether it's constant, daily, weekly, monthly or quarterly — and as soon as you're notified of credit activity, follow up on the alert. That may involve you calling a hotline for more details or logging into your credit monitoring account online.
On average, it takes consumers 222 days from the time fraud has occurred for a consumer to notice it, Bruemmer said, so the sooner you can find and address suspicious activity, the better. Credit fraud and identity theft can damage your credit score and be costly to reverse, both in terms of your finances and your time.
Is There a Support System?
Credit monitoring often comes with fraud resolution services, but not always. At the same time, fraud resolution may be offered without credit monitoring — it usually comes in the form of a hotline you can call if you detect unauthorized use of your credit or identity.
Trying to resolve identity theft or credit fraud on your own can be daunting, so it's nice to know there's someone to help you navigate the process after you've found something fishy. Some companies offer identity theft insurance, as well, which can ease the financial burden that sometimes comes after a fraud incident.
Choosing a free credit monitoring or identity theft protection service comes down to being informed and doing what ultimately makes you feel comfortable. A free product, even if it doesn't provide broad coverage, may be worth taking as an added security measure, but you still need to pay close attention to activity across all your financial and online accounts. You can check your free annual credit reports at AnnualCreditReport.com and you can get two of your credit scores for free every month on Credit.com.
Levin noted that, as helpful as free monitoring may be, it's mostly something companies offer as part of their public relations strategy after a breach. The freebies expire, but the threat of fraud will not.
"You have to have something that continues on beyond the breach, because no one is going to give you lifetime credit and identity monitoring," Levin said. "Unfortunately, you have to engage in a lifetime of credit and identity monitoring if your Social Security number was compromised."
There's no monitoring system that will catch any and all fraud someone may commit using your identity or accounts, but in general, when comparing credit monitoring or identity theft protection services, look for something that reviews multiple data sources, provides details on detected changes and offers guidance for resolving problems.
