Identity theft is one of the fastest-growing crimes in America. Many major insurance companies now offer an identity protection plan to their clients, which claims to deter, detect, and even resolve identity theft. An identity protection plan may monitor a client's credit card usage and credit score, and some even offer fraud resolution services. These plans are relatively new and have become popular as concerns grow about the damaging effects of identity theft.
Identity theft is when someone uses another person's personally identifying information to pretend to be that other person for personal gain. The perpetrator usually uses this personal information to steal money, apply for loans or credit cards in the other person's name, or, in severe cases, assume the other person's identity entirely. An estimated 10 million Americans are victims of identity theft every year, costing $50 billion US Dollars (USD).
Some identity protection plans provide online security software to help consumers keep bank account and credit card numbers private while shopping or banking online. Many plans also offer 24-hour-a-day, seven-day-per-week stolen card notification services. If the client's purse or wallet is stolen, he or she can simply call a representative with the identity protection plan, and the representative will report the credit, debit, retail, and gas cards stolen to the banks and lenders.
Most plans also monitor the client's credit score and notify the client when a new account is opened in his or her name. Obtaining one's credit score from credit bureaus isn't always cheap, so most people won't do this on their own. Requesting a credit score, however, is usually the best way of monitoring what accounts have been opened in a person's name, which he or she may not otherwise find out about until it is too late.
Other benefits of identity protection plans often include fraud resolution services, which help the client go through the process of reclaiming his or her identity and help to clean up any damage to his or her finances or credit score. The effects identity theft can be severe and fixing the many problems that identity theft can cause is a long and arduous process, so identity theft protection plans are growing in popularity. Most plans are relatively inexpensive, with a small monthly fee; an identity protection plan that covers the entire family may also be available.
Modified identity theft protection plans are also available through some banks and other financial institutions. These plans often cost the same as standard plans, but have fewer benefits. For example, a plan through a bank will monitor only the accounts and credit cards that are held with that particular bank. Many of these plans will, however, monitor the client's credit score and notify him or her when a new account at any financial institution is opened in his or her name.