Many people wonder if the cost of identity theft protection is a good investment. It is, for many reasons. In today’s digital age, committing identity theft has unfortunately become far much easier than it used to be even just a few years ago. Most individuals have their personal data stored in multiple places online and in the physical world. Credit cards are stored in databases to ease the customer’s payment experiences. A multitude of other personal information such as social security numbers, bank account information and medical information is also up for grabs to savvy identity thieves.
If you think it can’t happen to you, think again. Nearly 18 million individuals annual have their personal information compromised, according to the Department of Justice. Data breaches, mail theft, phishing scams, dumpster diving and weak online protection are the primary ways that miscreants can manage to gather a few pieces or all of your information. Once your identity has been compromised it can be costly and complicated to recover. That being said, the cost of identity theft protection services that offer credit monitoring, alerts, and recovery services is well worthwhile.
How Much Does Identity Theft Protection Cost?
The cost of identity theft protection is surprisingly modest considering the invaluable benefits and services they offer to consumers. Most basic contracts with major reputable companies runs about $10 to cover a certain level of your personal accounts and credit. Each enterprise offers different services, and may have tiered services for consumers to choose from. For example, a middle or top-tiered plan might include the core services in addition to key features such as:
- Social Media Monitoring
- Black Market Surveillance
- Pay Day Loan Monitoring
- Identity Restoration
- Identity Theft Insurance Coverage
These plans tend to run in the $19.99-$29.99 per month range, but there are other ID theft protections available to consider adding on to your chosen package.
Senior Credit Monitoring—Seniors are one of the most popular targets for identity theft. This is likely because they tend to be a bit more trusting and may have large savings, pensions, or benefit payments. Some companies offer this resource as add-ons to primary accounts. For example, two senior parents can be added to a LifeLock account for $19.99.
Children Credit Monitoring—Most youngsters don’t have any credit checks run until they buy their first car or get their first credit card. Identity thieves know this and love targeting kids, because no one will likely notice for a very long time. Much damage can be done, but adding offspring to an existing account can protect them. Policies typically start at around $5.99 per child.
Is Identity Theft Protection Tax Deductible?
Previously, companies had to experience a breach in order for themselves and their customers to consider identity theft protection services a tax deduction. However, in 2016, the Internal Revenue Service instilled a new policy deeming identity theft protection as a non-reportable, non-taxable benefit. This applies to both enterprises and personal consumers. Essentially, this means that the cost of identity theft protection is tax-deductible in accordance with the new guidelines.
The Importance of Recovery Services with Identity Protection Companies
Recovery services and insurance are often a part of many identity protection company’s coverages, particularly on the higher tiered packages. It cannot be stated strongly enough how essential recovery services are when your identity has been stolen. Under this protection, providers will take the lead in assisting customers with recovering their identity and getting their lives back to normal.
Recovery services typically include paying or collecting on unauthorized losses, managing debt collector’s services, fighting fraudulent loans and accounts, replacing credit cards and dealing with credit report agencies. If cases must go to court, the company also offers guidance and assistance throughout the process. You will need to sign a limited power of attorney to your identity protection company to allow them to take certain actions in the recovery process on your behalf.
Providers will have monetary limits concerning recovery assistance, and the amount usually depends on the tier of service and the company you contract with. For example, ID Shield will pay up to $5M in restoration efforts, while LifeLock offers $1M in protection. This includes legal fees, debt payments, and any other expenses related to the process. LifeLock is also one of the identity protection companies that offers coverage for lost wages that may be incurred due to identity theft.
The True Cost of Identity Recovery Without Insurance Protection
The insurance coverage afforded customers through recovery protection benefits with their identity theft service is invaluable in a number of ways. The most clear cut advantage is that they help identity theft victims with both direct and indirect financial losses. Direct losses refer to amounts misused or stolen, and indirect losses would be those such as legal costs, late fees, overdraft expenses, etc. Financial losses can range from hundreds to hundreds of thousands of dollars or more depending on the victim’s credit worthiness and asset holdings at the time of the theft.
There’s more than just financial loss involved in identity theft, as the situation is likely to have an impact on a victim’s credit score—especially if the incident goes undetected for a long period. These issues take the longest time to get resolved, which can lead to emotional woes. When one cannot resolve identity theft problems on their own, they are likely to feel angry, sad and fearful for their financial future. Identity theft protection with resolution and insurance coverage can put one’s mind at ease.
Identity Theft Protection Deals & Discounts
Deals for identity theft protection with vary between companies, as will the type of discounts available. It is not uncommon to see coupons online for a certain percentage off annual contracts such as 25% or even a flat cash discount. Long-term contracts will likely reap you the best deal overall beyond discounts. Most companies also offer a free trial, and many will offer a free month of service if you enroll. Other discounts to inquire about include: Military Discounts, Senior Discounts, and Family Discounts.