Is identity theft protection worth it?

What do identity theft protection services do?

An identity theft protection service typically monitors your information and credit status, sends you alerts about breaches and suspicious activity, and helps you navigate the process of identity recovery in case someone steals your identity.

However, an identity theft protection service does not include measures that would actively prevent identity theft.

So what is identity theft protection and what do these services really do? Here’s a breakdown of their offering:

• Dark web monitoring. Identity theft protection companies closely monitor the dark web for your credentials and personal information, in case they end up there after a data breach, malware infection, or some other cyber incident. Once you sign up for the service, you provide the information you want it to keep track of, for example, your email address, phone number, and Social Security number.
• Credit monitoring. They monitor for sudden changes or unusual activity on your credit file with either one, two, or all three major credit bureaus (Equifax, Experian, and/or TransUnion).
• Alerting. Identity theft protection companies send you real-time warnings if they discover your details on the dark web or suspicious credit activity, for example, if a new credit card was issued in your name.
• Coverage. If someone used your identity to steal your money or racked up debt in your name, some identity theft protection services will cover all or part of the expenses related to restoring your identity. 
• Assistance. Some services offer assistance with identity restoration services after identity theft. You can apply for a consultation with an expert who will guide you through the process of recovering from identity theft and regaining control over your accounts.

Some companies providing identity theft protection offer extra services, such as social media monitoring. They monitor your social media accounts for signs of suspicious activity, such as account takeovers, inappropriate posts, or your personally identifiable information being shared publicly. However, social media monitoring is not a standard feature across all providers.

With or without social media monitoring, you can still benefit hugely from identity theft protection providers.

What are the benefits of identity theft protection?

A reliable identity theft protection service gives you peace of mind and saves your precious time by keeping an eye on your personal information and credit records, so you don’t need to continuously monitor everything yourself. Timely alerts prompt you to look into your online accounts and secure them, when necessary.

In case identity thieves manage to get away with your data or sneak into your credit account, you’ll have the service in your corner, ready to help you with recovering your account and restoring your identity.  

Here are the main benefits of identity theft protection in more detail:

• 24/7 dark web monitoring. You won’t need to navigate the dark web yourself — if your information ends up there, you’ll be notified immediately, allowing you to secure your social media and marketplaces’ accounts by changing the password and enabling multi-factor authentication. 
• Cyberattack prevention. If criminals leak your information on dark web pages, forums, or marketplaces, malicious actors may use it for scams, phishing attempts, identity theft, and other cybercrimes. Dark web monitoring will alert you as soon as your details are leaked to help prevent these attacks.
• Credit monitoring. You’ll receive regular updates on your credit score together with credit status alerts so you can take action if needed. While you’re entitled to a limited number of free credit reports each year, identity protection services provide ongoing alerts, so you don’t have to request reports as often to stay informed.
• Early detection. Any data leak or unusual changes in your credit status will trigger a warning message, allowing you to act fast to prevent identity fraud and secure your financial accounts.
• Avoiding credit score damage. Identity thieves can severely damage your credit score, making it harder to secure loans or mortgages and raise your insurance rates. Damaged credit score can even affect your job or housing applications because employers and landlords often consider your credit history. If you get a message warning you about suspicious credit activity, you can place a credit freeze, lock your accounts, close fraudulent ones, and dispute fraudulent information in your credit report before it does more damage.
• Reduced risk of financial loss. Identity theft could leave you with an empty bank account or huge charges on your credit card. Getting that money back can be a long, frustrating process — and in some cases, it might not even be possible.
• Personal information protection. If identity thieves steal your personal information, like your Social Security number, they can misuse it for years. They might use it for identity fraud — impersonating you for financial gain. The sooner you find out about your personal information leak, the better.
• Avoiding potential legal problems. Once criminals steal enough of your personal information, they can impersonate you and commit crimes, which could result in serious legal issues. For example, you might be falsely linked to fraudulent activities or face charges for crimes you didn’t commit.

What are the drawbacks of identity theft protection?

While identity theft protection services improve your cybersecurity and help you secure your accounts before criminals can cause serious damage, you should be aware of their limitations and what these services do not provide:

• Don’t prevent all forms of identity theft. While identity theft protection services provide you with tools and resources to protect yourself from identity theft, no identity can be completely secure. It’s impossible to monitor all transactions or prevent all types of identity theft, especially those that are not untrackable. For example, if someone steals your mail or overhears your personal details in a conversation, a service won’t catch that.
• Cost. Identity theft protection services can be expensive, often with monthly or yearly fees that can add up. Read the fine print in the contract before signing up for the service.
• Limited coverage. Not all services monitor every potential source of fraud. Some might track your credit activity, but not your social media accounts or medical data. A service might alert you to a new credit card in your name, but it won’t notify you if someone shares your sensitive information on a social media platform. Browse several identity theft protection plans by different providers and check what specific information and accounts they monitor before choosing a plan.
• False sense of security. Having identity theft protection might make you feel fully protected, but it doesn’t eliminate the need to stay vigilant with your personal information. You still need to use digital security tools, such as a VPN and a password manager, and be careful with phishing emails and websites.

Are identity theft protection services worth the money?

Identity theft protection services mainly help you manage the damage if it occurs but they don’t prevent identity theft from happening. That said, imagine learning that your identity was stolen two months ago and spending countless hours contacting banks, disputing fraudulent accounts, and filing reports with various agencies to recover your stolen identity. On top of that, you could lose hundreds or even thousands of dollars if someone empties your bank account or takes out loans in your name.

Now, compare that to paying a monthly fee for an identity protection service, where basic plans start at around $6 per month and go up to $35 for the most comprehensive coverage for individuals, and $15–$40 per month for family plans.

The peace of mind that comes from knowing your information is being actively monitored is invaluable, especially when it comes to spotting problems early. Timely alerts let you take action right away and guide you on what to do next, helping you avoid losing money and stopping things from getting worse.