Besides Internet hackers, the recent Equifax data breach that compromised the private information of half of the U.S. population over 18 is benefitting another group: Identity theft protection services.
LifeLock expects to see an estimated 450,000 new members sign up for services by the end of the year, one executive told Bloomberg News.
The marketing rush to sell identity theft protection, which generates over $3 billion in profits annually, is an ongoing story for business reporters to follow. Then report on one or more of these 10 facts to produce a series of news or service stories for your readers.
10 facts about identity theft protection
1. Consumers don’t need to pay twice for identity theft protection. Equifax is providing that coverage free for a year for those whose private information was hacked through TrustedIdPremier.
2. One year isn’t enough time, however, to repair the damage caused by the Equifax data breach. Consumers need to make monitoring their credit a fact of financial life. “Criminals will certainly try to monetize the leaked data and perform ID theft for far longer than one year after this attack,” Katie Moussouris, founder of Luta Security, told CNN Tech.
3. Identity theft protection services don’t actually prevent identity theft. Credit monitoring, identity monitoring, identity restoration and identity theft insurance offer only limited protection, explains this March 2017 report from the Government Accountability Office, the federal government’s watchdog. Credit monitoring, for example, alerts consumers to fraud on new accounts, not existing ones. Identity theft insurance generally excludes direct financial losses.
4. Services do not include medical identity fraud protection or tax refund fraud, two of the fastest-growing types of identity theft. Medical fraud affected 2.3 million individuals in 2014. Consumers should submit their tax return early, to beat fraudsters.
5. Only four companies will contact creditors, employers and law enforcement agencies on your behalf to restore a stolen identity, says Reviews.com, a Seattle-based consumer site founded in 2013; the rest leave the work up to the consumer.
6. Consumers can repair their own credit, if necessary. It doesn’t take an average of 200 hours and 18 months to repair a stolen identity, a number widely attributed to the Federal Trade Commission. Most victims (52 percent) spend a day or less resolving financial and credit problems, and about 9 percent spend a month or more resolving problems, according to this latest survey from the U.S. Department of Justice, which now tracks identity theft (see page 10).
7. Consumers can protect their own information. Use free and low-cost alternatives, including free credit monitoring and paying for a freeze on your credit reports at Equifax, Experian, and TransUnion, says personal finance expert Clark Howard. Consumers should also put fraud alerts on financial accounts.
8. Identity theft is far less common than the identity theft protection industry implies. About 7 percent, or 17.6 million Americans 16 and older, were victims in 2014, according to the latest report from the U.S. Bureau of Justice.
9. According to the above report, about 4 percent of victims had their personal information stolen, and 7 percent experienced multiple types of identity theft during the most recent incident. Most (86 percent) had an existing credit card or bank account misused or stolen.
10. As of September, 2016, the federal government’s watchdog, the Government Accountability Office, issued at least 16 enforcement actions against LifeLock, TransUnion, Affinion, Intersections, and consumerinfo.com/Experian (see page 30).