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The Resource Center Credit Fraud & Credit Monitoring | post

Again: Monitoring Your Credit Report Does Not Ensure Protection Against Identity Theft

by Steve Schwartz on

No, no, a thousand times no!

That old expression can be applied to a number of issues surrounding identity theft. It can be applied to the actions people take that place themselves in danger. It can be applied to some of the advice that people who you would think are experts keeping giving out.

In a previous post, my colleague Joe Mason went into considerable detail as to why the advice to simply monitor your own credit report can give you early warning as to whether your identity may be being misused. Even worse, the advice that if you get a free copy of your credit report from each of the three credit reporting agencies in a staggered order throughout the year — you can be safeguarded throughout the year.

To very briefly repeat why this is inaccurate advice, or at least very incomplete, many of the uses of a stolen identity do not find their way into the credit reports issued by the three credit reporting agencies — Equifax®, Experian® and TransUnion®. Thus, if your identity or Social Security number is being used by someone else to rent an apartment, turn on utilities, start a cell phone account or file a tax return, those types of common uses of stolen IDs probably will not show up in the credit bureau files. Likewise, contrary to general belief, the three agencies do not have identical files; what shows up in one, does not necessarily show up in the other two. So getting one report every few months does not give you the whole picture.

I raise these issues once again because of a story on identity theft that Consumer Reports recently ran both online and in their monthly magazine.

In the story, CR repeated several opinions that the organization has held for some time: that the danger of identity theft to an individual "is exaggerated," and it is unnecessary to join any kind of monitoring service because you can "do it yourself for less."

I see the devastating results of identity theft to individuals every day. I look at the statistics coming out of the Federal Trade Commission (identity theft is the most frequent consumer complaint they've received for six years running), the Justice Department, the FBI and Secret Service, as well as numerous state and local law enforcement agencies. It seems to me simply self-evident that identity theft is real, that it continues to grow at an alarming rate, and that it does pose a real threat to us all.

We can do a lot to minimize the danger by being cautious about what personal information we give out. I talk about this all the time and will continue to do so. But there are instances where we have to give our personal information and where we have to trust it will be effectively safeguarded by those we give it to.

But with data breaches becoming regular occurrences quite often these days, whether from hacking or simply from misuse, despite everything we do, our personal information is out there and available to crooks to use for their gain and our loss.

Examining your own credit report on a continual basis is a good idea and, thanks to Federal law, it is free. You should constantly examine your own credit reports if for no other reason than to spot errors or incomplete information that needs to be corrected. A recent FTC report highlighted how common errors are, and how difficult it can be to get them corrected.

But to think that by monitoring your credit report you are protecting yourself from identity theft is just too simplistic and too ineffective. There are so many ways your name and your SSN might be misused by another, that a better idea is to subscribe to one of the identity monitoring services that use a wide range of sources to detect possible identity theft, and which does not simply rely on credit reports.

So once again I repeat this advice. It is more than likely that down the road I will have to repeat it again and again, in the face of seeming authoritative advice being given to simply monitor your own credit report for free as a way to insure against identity theft.