Is identity theft protection worth the money?
identity theft statistics have nervous consumers looking for protection,
and financial institutions scrambling for ways to provide it. But
not all protection plans are created equal, and some consumer watchdogs
say you should save your money.
The Federal Trade Commission says there were nearly
10 million identity theft victims in the United States in 2002.
The losses cost businesses and financial institutions $48 billion
and individual victims paid $5 billion in out-of-pocket expenses
to correct the damage and prove they were victims, not culprits.
Most of the identity theft plans being offered by
a growing number of financial institutions will reimburse customers
for out-of-pocket expenses up to a certain dollar amount and help
them through the process of contacting creditors, writing affidavits
and filing reports.
Some companies, such as Washington Mutual, offer customers
a basic plan for free and a souped-up version for a monthly fee.
Spokeswoman Mary Kelley says company research showed that most customers
were "extremely concerned" about identity theft.
"We asked if they'd be interested in free ID
theft services and a large majority said yes. But there was a smaller
but significant number that said they'd be willing to pay for additional
Washington Mutual's free plan is offered to all customers
who have a deposit account, but they must sign up. Included in the
package is toll-free access to the bank's Identity Theft Resource
Center if the customer becomes a victim of identity theft, free
access to credit education specialists and $5,000 in insurance (no
deductible) to offset recovery costs, including legal fees and lost
The bank's paid plan costs $10 per month. It increases
the insurance to $15,000 (no deductible), gives customers a copy
of their credit report with information compiled from the three
main credit-monitoring bureaus, monitors the customer's credit files
at the three bureaus five days a week and notifies the customer
daily of any changes.
Pittsburgh-based PNC Bank also offers two plans. One
is free to customers who have multiple accounts with the bank; the
second, called True Credit, is available to customers for $3.65
per month. Both plans provide insurance to cover expenses associated
with identity theft, but there are deductibles. True Credit offers
credit monitoring, but with only one of the bureaus.
"It's been very well received," says Laila
Batz-Krause, executive vice president. "It covers the individual
wherever the identity theft occurs. If I have an identity theft
involving the motor vehicle department, this will cover my costs.
It isn't just about our account -- we have a lot of safeguards --
it protects customers anywhere, which is where we think (identity
theft) is more likely to happen."
Officials at National City, headquartered in Cleveland,
are reviewing identity theft insurance plans and hope to offer a
program to customers by the end of the year.
"Identity theft insurance isn't the only thing
we're looking for," says Darla Mathy, a senior vice president.
"We want preventative-type measures. Insurance
is a component but it's after the fact. We want to assist our customers
in preventing identity theft. There are products out there that
for relatively minimal fees allow customers to monitor their credit
reports, and the companies can scan the reports. You're alerted
on a daily basis if there's been any activity."
Some consumer activists view the insurance with a