Written by Sean Cooper
Monday, January 18th, 2016
Identity theft is a faceless crime that can have a devastating impact on your finances and credit history.
In 2014, 20,611 Canadians fell victim to identity fraud with a total reported dollar loss of $10,484,492.50, according to the Canadian Anti-Fraud Centre. Meanwhile, credit monitoring promises to help protect you against identity theft, but is it worth the cost?
Protecting yourself with credit-monitoring services
Canada's two main credit-reporting agencies, Equifax and TransUnion, offer credit-monitoring services. Credit-monitoring services help protect you from identity theft by alerting you if someone tries to fraudulently use your identity to obtain credit. These services promise peace of mind, knowing you're better protected from identity theft.
The Complete Advantage Plan is offered by Equifax for $16.95 per month. This plan promises to keep you a step ahead of fraudsters, letting you know about any unexpected changes on your credit profile. Under this plan, according to the Equifax website, you get the following: comprehensive view of your Equifax credit report, your personal Equifax credit score, 24/7 credit monitoring with instant email notifications of key changes to your file, access to dedicated fraud specialists, and up to $25,000 in identity theft insurance.
Credit monitoring and ID theft protection is offered by TransUnion for $16.95 per month. The plan notifies you immediately of critical changes to your credit report, including fraud alerts and new names and addresses, which could be the first sign of identity theft. On top of that, you can instantly view your TransUnion Risk Score and view your debt-to-income analysis to see how your personal debt is affecting your finances.
Credit-monitoring services are intended for the average person concerned about identity theft.
Are credit-monitoring services worthwhile?
You can sign up for credit-monitoring services as a precaution or, if you've already been the victim of identity theft, as a way to help protect yourself against further fraud.
But before you sign up for credit-monitoring services, it's important to understand what you're paying for.
While credit monitoring is helpful, it won't necessarily stop identity theft from happening. While these services are supposed to alert you if your identity has been used fraudulently, it may not be until after the crime has already taken place. By then, the fraudster could have damaged your credit profile by making credit applications in your name.
An additional way to protect yourself is with a credit flag. A flag can be placed on your credit file for a small fee by contacting Equifax and TransUnion. With a flag present, when a credit request is made, the lending institution will contact you for approval.
Other ways to protect yourself against identity theft
It's a good idea to request a copy of your credit report once every 12 months. You're entitled to a free copy from Equifax and TransUnion, and your credit report can help you find errors and uncover fraud.
Even if you sign up for credit-monitoring services, it's still important to safeguard your personal information. You can protect yourself from identity theft in a number of ways. For example, never share personal information over the Internet or by phone unless you've initiated the contact, and be sure to shred bills and any other documents with personal information.