Needless ID-Theft Protection

It can be frightening when someone steals your financial information and goes on a shopping spree. That fear has helped drive sales of identity-theft protection services.

Americans are spending an estimated three-and-a-half billion dollars a year on these services. But Consumer Reports says-save your money!

Lauren Mirsky considers herself lucky. Thieves tried to use her credit card on two different occasions, but each time they were thwarted.

Mirsky says, "The first time it happened, the credit-card company called me when they thought there was suspicious activity on the card. The second time, it was actually an airline that called me when they thought someone was purchasing a ticket using my card."

Lauren was among the eight-million people who feel victim to ID theft in 2010. Plenty of financial institutions are marketing identity-theft protection services to people just like Lauren.

Consumer Reports Money Adviser says the rate of ID theft is actually declining.

Greg Daugherty, Consumer Reports Money Adviser says, "We found the companies often overstate the risk and puff up the power of their services."

The companies promise to alert you to suspicious activity with services like "daily credit monitoring" and "protecting personal information" including your "social security number."

Consumer Reports Money Adviser is "debunking ID-theft hype" after looking at nearly two dozen plans that cost $120-300 a year.

Daugherty says, "It turns out you can do much of this monitoring yourself for little money."

Start by getting your credit report free, once a year, from each of the three major reporting agencies, Experian...Equifax...and TransUnion. Look them over for anything suspicious.

Daugherty says, "Next, put a security freeze on your file with the same credit agencies. That blocks access to your credit report and makes it more difficult for a crook to get new credit in your name."

As for Lauren, thieves were stopped thanks to safeguards financial institutions have in place that are required by law-another reason you can skip ID-theft protection.

Consumer Reports says there are other safeguards worth taking...sign up for free alerts from your card issuer.

These red flag higher-than-usual charges on your accounts.

Also, routinely check your credit-card statements for unauthorized purchases.

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