My sister asked me recently if I thought she should freeze her credit indefinitely so that an identity thief couldn’t open any accounts in her name.
The reason for her question: She had received an unsettling letter in the mail from her toddler’s health care provider noting that his personal information may have been exposed in a data breach.
There have so many large-scale breaches lately (we’re coming up on six months since the Equifax data breach that compromised the personal information of 145 million Americans).
“It seems like everyone’s information is everywhere now,” my sister said in a later conversation.
Should my sister freeze her credit because of her concern about data breaches? I didn’t have an easy answer for her, but I understand her fear. Ongoing reports about huge data breaches have unsettled me, too.
A surge in data breaches
Data breaches hit an all-time high in 2017 of 1,579 breaches, according to the 2017 Data Breach Year-End Review released by the Identity Theft Resource Center and CyberScout. That marks an increase of 44.7 percent over the record number of data breaches reported in 2016.
“I definitely feel more threatened than before,” my sister told me. She fears the problem will get worse as more criminals turn to data hacking.
The problem for many of us is that it’s not always clear how best to protect yourself. Among the few options available, the costs can quickly add up.
Credit freezes and credit monitoring
Unless you’ve already had your information used fraudulently, you typically have to pay to upgrade protection of your personal information.
For example, depending on where you live, freezing your credit reports without proof you’ve been a fraud victim can cost as much as $20 per credit bureau ($60 if you freeze your credit at Equifax, Experian and TransUnion).
If you’re in a relationship, protecting your partner’s credit as well as your own could cost $120.
To unfreeze your reports, you may have to pay another fee. And the protection will only go so far.
A credit freeze won’t protect you from having your credit card data stolen and used without your consent, nor will it prevent identity thieves from using your identity for other, non-credit-related purposes.
Credit monitoring, similarly, could cost you as much as $20 a month. For this fee, a credit reporting agency or other company, such as LifeLock, monitors your reports and, in some cases, scans the web and public records for signs that your information is being used fraudulently.
Some credit monitoring services also offer insurance to help you deal with the financial ramifications of identity theft. But aside from alerting you early, these services won’t prevent the theft from happening in the first place.
Dark web scans and credit locks
Other identity protection tools have also popped up, but again their usefulness is limited.
For example, Discover last year introduced free Social Security number alerts. Discover cardholders can sign up for the service, which scans the dark web and will alert you if your Social Security number is found on “any of thousands of risky websites.”
Meanwhile, TransUnion and Experian have introduced convenient “credit lock” services that allow you to easily lock and unlock your credit reports instantaneously; however, you have to pay for the bureaus’ pricey credit monitoring services to get it.
Equifax, in the wake of last year’s data breach, will launch a similar service on Wednesday called Lock & Alert. The big difference: Users will be able to lock and unlock their credit reports for free.
Just like a credit freeze, a credit lock could stop would-be fraudsters from opening credit in your name but won’t stop fraudsters from filing an illegitimate tax return, applying for government benefits, opening a bank account or engaging in other activities using your identity.
The unfortunate truth is that consumers, by ourselves, can do only so much to protect our personal information. We’re at the mercy of other organizations, including our banks, hospitals, schools, retailers, credit reporting agencies and more, to protect our data, too.
That doesn’t mean you should throw up your hands and give up.
4 things you can do to protect your identity
Here are steps you can take to limit the possibility your information will be stolen:
1. Safeguard your passwords.
Regularly change your passwords, and don’t use the same password for multiple sites.
2. Place a fraud alert on your credit reports.
A fraud alert is free and ensures that a lender will verify your identity before it issues credit in your name.
3. Consider a credit freeze, if you can afford it.
Many states limit how much credit bureaus can charge for a credit freeze, which can cut your costs.
For example, Georgia limits credit freeze costs to $3 per report. Arizona limits the cost to $5. Other states limit it to $10, or require that credit bureaus waive the charges altogether for senior citizens.
Some states are also considering banning fees for credit freezes. To find out what your state charges, check out CreditCards.com’s handy list of state laws covering credit freezes.
4. Regularly check your credit reports.
You can review your credit reports for free once per year at annualcreditreport.com or view your TransUnion report for free at CreditCards.com.
Finally, don’t let yourself get jaded by all the data breaches in the news.
According to researchers at the University of Texas-San Antonio and Iowa State, many people have become apathetic about data breaches after hearing about so many of them.
“When a data breach happens they’re not motivated to take any corrective or protective action,” Iowa State University professor Rui Chen said in a news release.
“They don’t use a stronger password and change it more often or check their credit files.”
That’s a mistake, he says. “When this happens society pays, and criminals are the only ones who benefit.”
See related: Q&A: What to know and what to do about the Equifax data breach, How identity theft affects your credit score, 10 warning signs of identity theft