As the problem of identity theft has grown, so too has an industry designed to prevent and respond to the crime.

Several years ago, one firm offered a single identity theft insurance policy. Now, consumers can protect themselves with measures ranging from credit monitoring to fraud alert services and even home shredding.

For the most part, companies are selling convenience and expertise. Consumers can actually handle many of the tasks themselves, but at the cost of tracking down an array of phone numbers, filling out multiple forms or, in the case of the shredding service, tearing or cutting up a wide array of documents.

If you've wondered about the value of an identity theft insurance policy, AIG, a major insurance provider, reports that the average case takes 175 hours and $1,500 to clear up. (Other companies put the cost much higher, both in time and dollars.)

Most of that cost comes from time that needs to be taken off from work to handle tasks like getting affidavits notarized and schlepping to the post office. Since many cases of identity theft go undetected for months, the list of agencies and companies to be contacted can be extensive.

"I heard of an individual who had to write 90 certified letters," says Jean McDermott-Lucey, AIG's vice president of e-business risk solutions.

Costs and coverage
AIG's policy covers most of the expenses involved in re-establishing credit, including mailing costs, fees to re-apply for any loans that were denied, the cost of getting a new driver's license and any legal assistance that might be needed.

"We're prepared in the unlikely event that someone is arrested for a crime they didn't commit," McDermott-Lucey says.

The policy also covers a victim's salary, up to $500 a week for as long as four weeks, if they have to take time off from work to resolve the case. Plus, policyholders are provided with letters to send to their creditors.

"Most of our letters are written by counsel so when agencies get the letters, you have a well-worded document," she says.

The cost of the policy varies based on the amount of coverage purchased, but individual policies run $20 to $60 a year, she says.

Keep in mind the Federal Trade Commission has a free, downloadable affidavit that's accepted by a wide array of banks, credit card issuers and the credit reporting bureaus. The credit bureaus also have departments to help consumers walk through the process free of charge.

As a pre-emptive measure against identity theft, Datasafe Information Security is offering home shredding. The service is exactly what it sounds like. In New England at least, a Datasafe employee will come to your home with an industrial-strength shredder and obliterate anything from old credit card bills and prescription pill bottles to computer hard drives.

"Good luck trying to reconstruct that," Datasafe president Rick Carey says.

Anyone with a house, kids and a couple of car payments knows how quickly the information piles up.

"When you look at the correspondence, the average family produces a few boxes a year of pretty sensitive stuff," he says. "Fraud guys go around and grab those out of the trash all the time."

Carey says the shredders marketed to consumers only process about three sheets of paper at a time and bite the dust pretty quickly. He charges about $60 to shred two to three copier boxes full of paper, and it's done in about four minutes.

For those outside his direct service area, he offers shipping. He sends out a packing box, and when it's full, customers send it back via FedEx for destruction. Cost is about $50 a box.

"We have it documented to the point that an auditor is happy," he says.

Monitoring your credit, your life
Credit and privacy monitoring is another emerging service in the fight against identity theft.

Privacy Guard, which offers a three-month trial for $1 to entice consumers to spend $79.99 for an annual membership, is marketed as an early warning system to see if anyone is trying to obtain credit in your name. The service also provides user-friendly versions of credit reports and access to driver's license and Medical Information Bureau records.

If a member does have a problem with identity theft, Privacy Guard provides the necessary forms to request changes at the credit bureaus, and then sends out a new copy of the credit report 90 days later to make sure the errors have been corrected.

All three credit bureaus have fraud divisions, though, and work with consumers to repair credit problems related to identity theft.

Intersections, which bills itself as a privacy protection company, offers Identity Guard, a similar suite of products that includes access to the information in your credit file at Equifax, daily monitoring of changes posted to the report, notification of possible fraudulent activity and reimbursement of up to $2,500 worth of out-of-pocket expenses for identity theft victims, after a $250 deductible.

Included in the package is a credit analysis, advice on improving your credit score, quarterly credit updates and access to credit education specialists. They also have a staff available to help victims walk through the process, and credit education. Cost is $39.95 for six months of service.

Fraud alerts
It makes sense that a credit card issuer would also get into the game. Metris, one of the nation's largest MasterCard issuers, offers a full-service package that includes Fraud Alert Services for prevention and resolution of identity theft problems, and Direct Alert for regular monitoring of your credit information.

The Fraud Alert package includes firewall software, digital hacker alerts, access to the company's Internet Protection Center, document registration for credit cards and important papers such as insurance policies, birth certificates and bank records, emergency travel assistance and staff that creates a customized plan to walk you through identity theft resolution and helps you work with law enforcement and creditors on three-way conference calls.

You may be able to get Fraud Alert if you have a Visa card through a bank; Metris sells the package to them to resell to their customers as a benefit. You can also sign up directly with Metris. A three-year membership is $119.95, or about $3.30 a month.

"The firewall software alone is a $90 value for a three-year license with MacAfee," says Bill Anderson, the company's executive vice president of enhancements. "And we feel the other services are highly valuable."

Like Identity Guard, the Direct Alert service includes a tri-bureau credit report when you register, followed by weekly updates and tips on managing your credit. You also get your credit score and some cool information on how you rate by age, state, and the nation.

You also get online access to a credit bureau and can set your own parameters for alerts, such as the sizes of balances on credit accounts or credit inquiries.

The cost is $129 for a three-year membership, although they also will sell it for a shorter time. You might also be offered this through a bank credit card. Anderson says when they sell it through Citibank, it goes for $9 a month.

If you've been the victim of identity theft and need to keep a close eye on things like credit card and loan applications, or if you just like to stay on top of your credit information, these products and services are probably worth looking into.

Just keep in mind that the credit bureaus and the Federal Trade Commission can provide some of the same services for free.

Call these numbers to report a suspected case of identity theft to the credit bureaus: Equifax, (800) 525-6285; Experian, (888) EXPERIAN; TransUnion, (800) 680-7289.

They'll put a fraud alert on your file. By doing that, you'll be notified when anyone inquires about your credit or attempts to open an account in your name. The workers in the fraud departments can walk you through the steps to clear up any problems caused by the thieves.

-- Posted: May 28, 2002