Should You Use an Identity Theft Protection Service?

Identity theft protection services can help you safeguard your identity for a fee. While there are ways to protect yourself, many feel that such services are worth the cost.

By Elliot M. Kass | American Express Credit Intel Freelance Contributor

5 Min Read | March 30, 2022 in Credit Score



For a monthly or annual fee, identity theft protection services offer ways to help protect you from identity theft. 

They generally offer various combinations of services like credit monitoring, identity recovery, and identity theft insurance.

Much of what identity theft protection services offer can be done by yourself for free, but it requires discipline and effort. Instead, many people choose to use a service as a safety net.

If you’re wondering how to protect yourself from identity theft, you might already be on the right track to safeguarding yourself from an increasingly common crime. In fact, 2021 broke records with nearly 1.5 million reported cases of identity theft in the U.S. alone.1

Given the time and effort often needed to resolve identity theft issues, the prospect of having your identity stolen is rightfully concerning. However, there are ways you can protect yourself from identity theft, whether you prefer to enroll in an identity theft protection service or you have a DIY mentality. Here are some key things to know about identity theft protection services to help you decide the best approach for you.

Did you know? As an added security measure to help protect against fraud, American Express reports a reference number to credit bureaus – instead of your actual account number.


What Are Identity Theft Protection Services?

An identity theft protection service is essentially a promise to help prevent identity theft by safeguarding your personal information for a monthly or annual fee. While numerous companies offer these services, most are geared toward alerting you that someone may have tampered with your personal records and accounts, not preventing it from happening. In many cases, protection services may also help you recover from an incident should one occur.

Generally, identity theft protection services will:

  • Monitor your credit.
  • Look for unauthorized use of your personal information.
  • Alert you to potential threats.
  • Scan multiple computing devices and continuously update your security software.
  • Help you restore your identity if it is stolen and provide some insurance against any losses you may incur.

Let’s take a closer look at three basic types of identity theft protection services:

1. Identity Monitoring Services

There are two basic types of monitoring services: credit monitoring and identity monitoring.

  • Credit monitoring tracks your credit reports at the three major credit bureaus: Equifax, Experian, and TransUnion. This covers many activities that are subject to fraud – like applying for a loan or opening a new credit card account – but not others. For example, credit monitoring won’t alert you if an identity thief withdraws money from your bank account or uses your Social Security number to file a tax return and collect your refund.
  • Identity monitoring alerts you whenever your personal information – such as your bank account, Social Security number, driver’s license, passport, or medical insurance ID number – is being used in ways that don’t usually show up on your credit report but may also be subject to fraud. You might be alerted if a thief submits a change of address request to reroute your mail, for example.

2. Identity Recovery Services

Identity recovery services are designed to help you regain control of your good name and finances if your identity is stolen. Typically, trained counselors or case managers will walk you through the process of recovering your identity. This may include help with matters like contacting creditors and debt collectors, and freezing your credit reports.

3. Identity Theft Insurance

Identity theft insurance is also offered by most of the leading identity theft protection services, although it’s often fairly limited. As a general rule, identity theft insurance only covers out-of-pocket expenses directly associated with reclaiming your identity, such as postage, copying, and notary costs. In some instances, lost wages and certain legal fees might also be covered, but you won’t be reimbursed for any money that’s stolen or other financial losses you may face.


How Much Does an Identity Theft Protection Service Cost?

The cost depends on the level of protection they provide, and some companies offer multiple plans with different levels of service. Basic, no-frills credit monitoring, plus some limited recovery services, can cost as little as $19.95 a month or $219 for an annual plan. A premium service that includes extensive recovery assistance, identity theft insurance, and legal assistance can run $29.99 a month or roughly $330 for a full year’s worth of coverage.2 


Other Ways to Protect Your Identity

If you’d prefer not to spend money on a service, there are effective steps you can take on your own to protect yourself. These include:

  • Monitoring your credit reports, which you can do yourself for free by going to Hosted by all three major credit bureaus, this is the only website authorized by the federal government to provide credit reports without charge – one per year from each of the three major credit bureaus.
  • Carefully reviewing your credit card, bank, and financial account statements at least once a month for any suspicious activity or fraudulent charges.
  • Reviewing the explanation of benefits (EOB) statements you get from your health insurance providers for treatments you never received or authorized.
  • Placing a credit freeze – also known as a security freeze – on your credit files with the major credit bureaus. Putting a freeze in place doesn’t cost you anything and will prevent anyone from accessing your credit reports without your permission. This generally blocks identity thieves from opening a new account in your name.


Is Using an Identity Theft Protection Service Right for You?

Deciding whether or not to use an identity theft protection service often comes down to peace of mind. If you would rest easier knowing that you have a service at work that’s closely monitoring your account activity and is prepared to take charge should the worst happen, it’s worth considering signing up for one. Additionally, it’s common for people who have already experienced identity theft or have had their personal records exposed due to a data breach to sign up for identity theft protection services.

But if you’d prefer not to spend money and have the time and desire to take a hands-on approach to identity theft protection, you may want to do it yourself.


The Takeaway

Identity theft protection services won’t necessarily prevent your identity from being stolen, but they can help alert you to suspicious activity and help you to recover if your identity is stolen. Some people may be able to provide themselves a similar degree of protection without paying a monthly fee, but others may feel that having a service as a backstop is well worth the expense.

Elliot M. Kass

Elliot M. Kass is a journalist who has covered global business and technology from New York, London, and San Francisco for more than 30 years.


All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

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