Should You Pay For Identity Theft Protection?

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It sounds so smart and safe — identity theft protection. But considering all you can do on your own to protect your identity, is it something worth paying for? Weigh the pros and cons first, then go with whatever feels most comfortable and practical to you.

Pros of ID Theft Protection Offers

You can set it and forget it.

Instead of trying to remember to keep a watchful eye on things by yourself, you can pay an identity theft protection company to do it for you. If and when anything looks fishy, they’ll let you know about it.

Their monitoring is comprehensive.

They’re not just looking for red flags on your credit reports or bank accounts. You can pay an identity theft company to monitor all sorts of things for fraudulent activity. For example, you can get alerts when your social security number is used, or if any of your personal information appears in court records, medical records, change of address requests, payday loan applications, and more. They also monitor the dark web. The dark web is a part of the internet that isn’t indexed by search engines. On it you can buy social security numbers and other personal information.

They offer repair assistance in the event your identity is stolen.

It may take dozens of hours over several months’ time to sort out the mess if and when your identity is stolen. You can choose an identity theft protection plan that includes help in the repair process.

Cons of ID Theft Protection Offers

Costs can range from $85 to more than $350 a year.

Among the top-rated identity theft protection companies, plans range from $6.99 a month to $29.99 a month – money you could be putting toward savings or paying down debt. You can always choose the cheapest plan, but then you’re getting fewer of the bells and whistles that make paid identity theft protection so attractive.

Identity theft insurance can be misleading.

Read the fine print to see exactly what identity theft insurance covers. For instance, legal expenses and lost time from work may not be covered. Plus, there may be a deductible to meet.

Also, keep in mind that your liability is already limited for unauthorized credit and debit card transactions. You can also check with your homeowners or renters insurance company to see if they offer identity theft insurance, which may be added for as little as $25 to $50 a year.

Id Theft may not be worth it.  For most victims, there’d be no losses for insurance to cover. One 2015 report from the U.S. Department of Justice found just 13.8% of identity theft victims experienced any out-of-pocket losses at all — and just 6.1% experienced the indirect losses that identity theft insurance can cover. Of those who lost money, about half lost less than $100 total, while the median indirect loss was just $30.

There’s plenty you can do for free.

1) Get free copies of your credit reports from all three major credit bureaus through You can even stagger them so you’re getting a look at your credit once every four months.

2) Sign up for free credit monitoring with sites like Credit Sesame, and Credit Karma. Note, though, this will require providing them with the personal information they need to access your credit reports and scores.

3) Monitor your checking, savings, and credit card accounts online.

4) Remove your name from mailing lists, including credit card offers, junk mail, phone solicitation lists, coupon mailings, and more.

5) Protect yourself online. Learn how to hide your IP address, encrypt your email connection, encrypt the content of your emails, shield your credit card number when making an online purchase, encrypt your connection with websites you visit, and more.

6) Take care of everything yourself if you are a victim of identity theft. Contacting the authorities and place fraud alerts on your credit reports.

There is no guarantee of identity theft prevention.

The most expensive, comprehensive identity theft protection plan cannot guarantee theft prevention.

How to Choose an Identity Theft Protection Company

If you’ve weighed the pros and decided you’d like to try identity theft protection, shop around for the best deal first. Consumer Affairs is a good place to start. In their Identity Theft Guide, you’ll find reviews of their best-rated identity theft protection companies, including LifeLock, Identity Guard, and IdentityForce. And don’t miss the section on protecting your kids – yes, they can be victims of identity theft, too!

Major Identity Theft Monitoring Companies

Name Monthly Fee
Lifelock Identity Theft Protection $8.99
Identity Guard $8.99
IdentityForce $14.99
Experian $9.99
IdentityIQ $6.99
AllClearID $14.95
IDShield $17.95
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