Is Identity Theft Protection Worth It or Not?

Identity theft ranks as one of the top U.S. consumer complaints.

No one can stop ID theft, but credit and identity theft monitoring services can help. They track pieces of your financial life and flag symptoms of identity fraud, for a monthly or annual fee.

Simple products may let you access your credit score and report. More complex ones notify you of other details used too, such as where your Social Security number is being used to apply for credit or services.

Is identity theft protection worth it? That depends. For instance, if your personal information has been compromised in a breach, you're more likely to become a victim of identity theft. So risk might be a factor.

Another factor might be personal. Are you a do-it-yourselfer when it comes to protecting against identity theft, or do you just want it done?

What does identity theft protection offer?

Identity theft protection services typically include one or more of these features:

• Credit monitoring tracks the information on your credit report and helps you discover new fraud, but it doesn't prevent thieves from taking over your existing accounts.
• Identity monitoring checks whether your information has been misused on public records and illicit websites, which may include the dark web.
• Identity restoration provides assistance for recovering from identity theft. Service will vary depending on your provider, but it may include a dedicated case worker who handles details.
• Identity theft insurance reimburses you for certain costs associated with identity theft, although it may not reimburse money that's stolen. Keep this in mind, too: For lost or stolen credit and debit cards, federal law caps your liability for fraudulent purchases at $50 if you report it within two days.

And how much does it cost for identity theft protection? You might pay around $10 a month for the simple services and about $30 a month for a plan that offers several layers of identity protection.

How do I help protect my identity for free?

If you're looking for a DIY approach, there are a few ways to help protect your identity for free.

Sign up for free credit and debit card alerts, which can update you on everything that happens in your accounts—transactions, balances and more. As for your medical identity, you can check your "explanation of benefits," a document your health insurer sends you after you receive medical services, to look for red flags.

To monitor your credit report, there are several services that offer free access to your credit reports. For example, a provider may give you free, unlimited access to one or more of your credit reports and scores.

For a preventive measure, you can put a freeze on your credit file so others can't open accounts in your name. This usually isn't free and varies by state. You may pay about $5 to $10 per freeze. Plus, you may pay another fee to thaw the account.

Keep in mind that these measures offer limited protection. For instance, a credit freeze won't protect the accounts you already have open, and monitoring your credit reports may not flag when someone uses your identity after being arrested, for instance. You'll also miss out on recovery services included in some of those paid plans.

Which identity theft protection is best?

There's only so much you can do to help protect against identity theft. If your information has already been part of a security breach, there may be a higher chance that you'll become a victim of identity fraud. After all, thieves can't "unsee" that info.

An identity theft protection service could provide value by quickly notifying you of activity regarding the use of your personal information. And responding swiftly to potential identity theft is one of the best ways to not lose money.

Before you decide on a service, look for these details.

• Consider whether you're willing to put in the work to track your own credit (keeping in mind you might not have the ability or time to check certain areas).
• Compare a few services and what each offers.
• If you'll need to add a family member, check whether that's included in your cost or whether you'll need to pay more.
• Consider choosing a service that monitors reports at one or more of the three credit bureaus: TransUnion, Experian, and Equifax.
• If the plan offers personalized service or legal assistance (typically offered for identity restoration), ask for details on what this involves and what your costs will cover. Ask whether you'll pay for anything out of pocket.
• If the plan offers insurance, check what costs it will actually cover.

The best identity theft protection service is one that's coupled with your own common sense—always keep your information private and secure, and consistently monitor your accounts.