What is An Identity Theft Insurance Policy?

In 2005, an estimated 8.3 million people have been victims of identity theft. This staggering report was by the Federal Trade Commission (FTC). From these cases, about half has caused damages amounting from $500 to as much as $6,000.

Apparently, despite the continuous advancement in technology, identity theft has become more prevalent than ever. The use of “skimming devices” that are so small, they can be hidden in the palm of a hand has victimized many unsuspecting people, particularly in restaurants.

Identity thieves have also found a lot of ways to steal information through the internet. “Phishing scams” and “phishing websites” has made it too easy to steal bank details and credit card information online. One website may look exactly like the official website of a reputable merchant, company or government organization. For those who do not know how to tell the difference, they may not be aware that they are giving away personal information to the wrong hands.

E-mails may also contain links that lead to or “phishing” websites. When the recipient of the mail clicks on the link, he/she will be directed to a fake website that is made to look like the original. An unsuspecting person may fill-out an application form, without realizing that he/she has been a victim of ID theft.

Protecting Yourself Against Identity Theft

To fight fraud and identity theft, consumers must educate themselves about the tactics used by thieves and scammers. One way to get protection is by acquiring an identity theft insurance policy. This type of insurance plan provides coverage in case a person has been victimized by identity theft.

Although it may sound like a good deal, some financial experts consider ID theft insurance policy as a waste of money. The reason is because the Identity Theft insurance policy itself offers very limited protection.

For instance, in case ID theft, the policy holder will not be paid back with monetary losses. The policy only covers costs that may be incurred to deal with the situation such as phone calls to creditors, mailing expenses, and attorney fees. Furthermore, if ID theft or unauthorized charges has been committed by a family member, the insurance company will not pay for the damages.

Therefore, instead of paying for an identity theft insurance, a credit counselor may recommend other steps to avoid ID theft such as shredding documents before throwing them in the trash, not providing your social security number to anyone, checking the security of the websites you open, reviewing your bills before payment, using the ATM with caution, checking the reputation and credentials of a merchant or creditor you’re dealing with, checking your personal credit report score from the three major credit bureaus at least twice a year, and more.

 

About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2010
 

One comment

  1. As you know there is little to can do to stop ID Theft. Your information is everywhere, ID Theft protection can also create a false sense of security.

    When your ID is stolen will you know it and if so could YOU fix it. Most programs only cover Financial ID Theft, not even mentioning the other forms ie. SS#, Medical, Driver License,and Character/Criminal ID Theft. They also leave all the work up to you to solve. Some may give you a toll free number for someone to hold your hand. This still can take 400-600 hrs of your spare time to resolve.

    You need to have the ability to get a current credit report, monitoring, and a global company with experts in the business of doing all the work on your behalf. Having 24 hour nationwide access to an attorney is also key in the event you are stop by the police only to find out you are a criminal and did not know it. It only takes a second to still your identity it can take a lifetime with out the proper knowledge and expertise to solve.

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