Feature Article
Mark Pribish
Understanding the ID Theft Industry and Choosing the Right ID Theft Service Provider
By Mark Pribish
Vice President and ID Theft Practice Leader

It seems like a day does not go by without being inundated by radio and TV advertisements or unsolicited mail and email to sign up for some type of an ID theft protection program.

Based on the above, this article will serve as a crash course in understanding the ID Theft industry and how to choose the right ID Theft service provider for you and your family.

In January of this year, Consumer Reports published an article reviewing ID Theft service providers (see the article here) and highlighted how the marketing of ID Theft services can be deceptive. Until recently, the ID theft marketplace has been highly unregulated where many ID Theft service providers have marketed misleading value propositions and misrepresentations.

Another issue of Consumer Reports magazine in February highlighted that (see the article here), the ID Theft marketplace is a $3.5 billion industry, with 50 million people paying $10 to $25 per month for some type of ID theft solution. The same article reported on how most ID Theft protection plans provide questionable value and that you do not "need a costly service to protect your good name."

Recently, a new federal regulatory agency called the Consumer Financial Protection Bureau (CFPB) came down hard on the ID Theft industry for deceptive marketing practices. Specifically, and just last summer, Capital One, Discover Financial Services and American Express agreed to pay nearly $500 million in refunds and penalties related to deceptive marketing of identity protection, credit monitoring, and other services. Prior to that, Affinion, Experian Consumer Direct, and LifeLock were caught and fined significant financial penalties for alleged deceptive marketing practices.

So what should you as an individual consumer look for when considering an ID Theft service provider for yourself and your family?

  1. Education - you should understand the different recovery options available in the ID Theft marketplace. For example, is the program an assisted solution (where the ID Theft provider expects you to do the work) or is it a fully managed recovery solutions (where a professionally trained recovery advocate acts on your behalf until you are returned to pre-identity theft event status).
  2. Buyer Beware - Buyer Beware – you need to be aware of the "fine print" and common "exclusions" of ID theft programs. For example, a certain percentage of ID Theft events are not covered by ID Theft service provided based on unique terms and conditions.
  3. Family Coverage - you should consider how an ID Theft program will protect your family members living in the same household – versus only certain members of the household.

If you are thinking of enrolling in an identity theft program, I recommend first reading the Consumer Federation of America's "Nine Things to Check When Shopping for Identity Theft Services". These tips were developed by CFA's Identity Theft Service Best Practices Working Group.

To conclude, whether you use an independent resource such as the CFA or Consumer Reports Magazine, or a trusted advisor such as your local bank or credit union, you should ask the following questions when reviewing a subscription to any ID Theft program offer:

  • Does the program offer a fully managed recovery service including the use of a limited power of attorney (LPOA)? An LPOA specific in time and scope which allows a professionally-trained recovery advocate to act on your behalf until you are returned to pre-ID Theft event status.
  • Is the program supported by professionally trained, FCRA (Fair Credit Reporting Act) and FACTA (Fair and Accurate Transaction Act) certified, licensed investigators with the Certified Identity Theft Risk Management Specialists (CITRMS) designation? Or is the program supported by call center representatives with scripted answers and high turnover?
  • Does the program cover unknown ID Theft events that occurred prior to the effective date of the plan? If not, you might be out of luck when the service provider responds by saying we cannot help you because you were a victim before your subscribed to our service.
  • Does the program include family fraud? According to a 2011 study by ID Analytics, approximately 500,000 children under the age of 18 have had their identity stolen by their parents, and about 2 million elderly parents have been victimized by their adult children.
  • Are acts of terrorism included? As ID Theft is a form of fundraising for terrorists.
  • Are domestic partners and self-employed persons included? As they are recognized by some service providers as high risk.
  • Does the program include an extended 3-generation family plan, including grandparents and children? If not, what happens to your mother-in-law in the nursing home or your student living at college?
  • Is there an unlimited discovery period for ID theft events? Some ID Theft victims do not know they are a victim until after a year. This is important as some service providers require a victim to report their event within three or six months.
  • In the event your identity is stolen, is there 24x7 online access to view the status of your restoration case status? This helps victims track the status of their case at anytime and any day of the week.

Sincerely,
Mark

To learn more about these threats and how to protect yourself and your family from Identity Theft, you can read my past newsletters at the Merchants Identity Theft Educational Website at www.idtheftedu.com.



Scam Central

Complaint Notice Generating More Complaints

For business owners, receiving a complaint about your company can certainly sting a bit. Nobody likes the thought of having the business reputation tarnished by an unsatisfied customer, and that is especially true in a service industry such as a restaurant. One bad compliant can cause hundreds or perhaps thousands of potential customers to think twice about visiting your establishment if the service they may receive is questionable. There is plenty of competition around after all. Some people may be inclined to settle for less satisfactory food as long as the service is top-notch.

As if receiving complaints directly from customers isn't enough, now imagine that the FTC sends you an email notice about customer complaints registered against your company. Talk about pouring salt on the wound. How bad must a complaint be that the FTC has to get involved in the whole thing? What are we being accused of, theft, deceptive business tactics, fraud? Any one of these allegations would surely run through a business owner's mind. Whatever the complaint is, if the FTC is involved, you probably want to take care of the problem quickly. The only problem, of course, this email is not from the FTC.

How It Works:

According to an article on the Better Business Bureau website, you may receive an email from the FTC that looks very official, complete with graphics and logos. Within the email, you are notified that there are some complaints registered against your company and you are also told to visit the FTC's website to respond to the allegations as quickly as possible. Conveniently, they have provided some links for you to click.

Just a few clicks and your problem will be solved, right? Well, not quite. As you may already suspect, clicking the link takes you to a malicious website that quickly deposits some malware on your computer, which quickly starts scanning for any personal or banking information it can find and sends it back to the scammer.

Your Defense:

This is just another type of phishing email, and like all of the other phishing emails you get, delete this one and do not click on the link putting yourself at further risk of identity theft. Scammers are getting very sophisticated in their craft and the fake emails can end up looking very official.

Ask yourself an obvious question: Are you a business owner? If the answer is no, then how can there be a complaint against your company? If on the other hand you do own a business, be cautious. You should still be leery of clicking on links in an unsolicited email. Scammers are very good at making emails, letters, and websites look official by stealing logos and other graphics from the sites they impersonate. So while the email may look official, what about the links within the email? Hover your mouse above them and see if the link points to an FTC web address. Most likely, it will not.

When in doubt about such suspicious emails, do not be afraid to contact the FTC directly to inquire about the matter, especially if you are a business owner. The identity you save may be your own!

If you believe your identity has been stolen, call 866.SMART68 today.