Best Identity Theft Protection Services

Identity theft protection is an essential tool in today’s digital world, where personal and financial data are increasingly at risk. This guide covers the key features of identity theft protection services, explains the types of coverage available and highlights the steps you can take to protect yourself. Whether you’re concerned about financial fraud, medical identity theft or safeguarding your child’s identity, this guide offers valuable insights to help you make informed decisions.

What is identity theft protection?

Your identity is composed of a range of factors, including credit use, financial history, medical history and more. Identity theft protection companies typically monitor activity on your credit cards and other personal accounts to determine if your personal information has been compromised.

Some identity protection companies employ preventive measures to keep your accounts safe. Many can also help to repair and resolve problems caused by identity theft.

» MONITOR YOUR CREDIT NOW: Best credit monitoring services

Types of identity theft

Most cases of identity theft are related to financial information. According to the Federal Trade Commission, the most common forms of identity theft are:

• Credit card fraud
• “Other” identity theft (social media, online shopping, email, medical services, insurance, etc.)
• Bank fraud
• Loan or lease fraud
• Employment/tax fraud

» MORE: How to check for identity theft

ID theft vs. ID fraud

Identity theft happens when an individual obtains someone else's personal or financial information without their permission. Identity theft leads to identity fraud when a criminal uses an individual's personal or financial information to commit fraud.

How does identity theft happen?

Within the five most common identity theft categories, there are countless ways thieves can access your information and use it illegally.

How does identity theft protection work?

Identity theft protection companies monitor your credit cards, bank accounts, Social Security information and other sensitive material. They alert you if your personal information is used in a way that seems suspicious or unusual compared with your usual activity. For example, they’ll notify you if someone uses your Social Security number to apply for a loan.

The best identity protection companies use preventive strategies (e.g., reducing customers’ public exposure and monitoring black market websites for customers’ information) as well as recovery assistance.

Identity theft prevention vs. identity theft recovery services

Identity theft prevention companies alert you to potential fraud on credit reports and remove your name from various mailing lists to minimize the chance of identity theft issues.

If your identity has already been stolen, however, you’ll need help fixing the damage. Dealing with identity theft can be tedious and frustrating, but many identity theft recovery companies offer personal assistance to help you reclaim your identity and repair any damage done to it.

Identity theft monitoring services

Full-service identity theft companies offer a few different types of monitoring services:

• Credit monitoring: Credit monitoring services track a person's credit profile so any suspicious activity doesn’t go undetected.
• SSN monitoring: Some identity theft protection companies monitor the use of a person's Social Security number and notify users if anyone else attempts to use their number.
• Comprehensive monitoring: The best identity theft protection companies monitor your credit, Social Security number, finances and medical history.

Identity theft protection reporting

Identity theft protection companies typically send reports of your financial situation and identity history. This way, even if the company doesn’t notice something unusual in your report, you should be able to.

• Individual bureau credit reports: You can get a report from one specific credit bureau with information about your credit score, individual credit accounts and credit usage over time.
• Comprehensive credit reports: These provide full reports from all three credit bureaus (Experian, TransUnion and Equifax) as well as other financial information.
• Online scan reports: Some identity theft protection companies review a number of online resources to monitor your exposure, and then they compile and share any notable information for you.

Identity theft insurance

Identity theft insurance can compensate you in the event your identity is stolen. This type of insurance typically cancels and replaces stolen credit or debit cards and sometimes includes reimbursement for stolen cash.

Companies that offer full identity theft insurance may reimburse customers for the entire cost of repairing their identity. This may include the following:

• Cost of document replacement
• Case manager fees
• Legal fees
• Lost wages
• Bank fees
• Fraud alert fees

Make sure you’re aware of any limits on your reimbursements — some companies pay only filing fees or have a cap on lost wages insurance.

How to prevent identity theft

It’s crucial to be careful with your sensitive information. While even the most cautious can still find themselves falling victim to identity thieves, every effort counts.

Use two-factor authentication and strong passwords for online accounts to add extra protection. Regularly monitor your bank and credit statements for unusual activity.

Some of the most important steps to keeping your identity safe include the following:

• Monitor your accounts for unusual activity. Report anything strange you notice.
• Keep important personal documents secure. Store paper documents in a safe place, and don’t share sensitive information online unless you’re sure the website/entity you’re working with is trustworthy. (Websites that begin with https:// — not just http:// — are secure.)
• Check the safety practices of the businesses and organizations you deal with. Make sure their systems are built to keep user data safe.
• Use two-factor authentication and complex passwords (and don’t use the same password across the board) for online accounts.
• Install antivirus and malware detection and update your devices' operating systems.
• Shred personal documents and talk with your bank about their fraud detection and prevention services.

Also, check out the Identity Theft Resource Center, a nonprofit whose mission is to “empower and guide consumers, victims, business and government to minimize risk and mitigate the impact of identity compromise and crime.” The organization has a wealth of tips on identity theft prevention and recovery.

How to report identity theft

If your identity is stolen, report it on the FTC’s IdentityTheft.gov website. In some cases, it makes sense to report the theft to law enforcement — if you decide to report it to the police, the FTC recommends filing an identity theft report first and including it with your police report. If you have identity theft insurance, make a claim with your provider.

If you’re the victim of identity theft, take the following steps:

1. Contact your bank and credit card companies to lock your accounts.
2. Check your credit report to see how much damage has been done.
3. Place an initial 90-day or one-year fraud alert on your credit report. This requires any new creditors to make sure the person requesting credit is, in fact, you.
4. If you file a police report or FTC identity theft report, consider placing an extended seven-year fraud alert on your credit.
5. Consider freezing your credit with all three credit bureaus.
6. Document everything you can as proof that you’re not responsible for any fraudulent activity.

If you’re dealing with a cybercrime incident, report it to the FBI’s Internet Crime Complaint Center.

Why is it important to report identity theft?

Every identity theft/fraud report the FTC receives adds to cases against scammers. Reporting your particular instance helps to catch these scammers, helps the FTC understand whom criminals are targeting and how, and helps prevent would-be victims from experiencing the same pain.

Identity theft stats

In our recent identity theft study, we found some alarming stats for 2023 — as well as some good news:

• 416,582 cases of credit card fraud were reported in 2023, making it the most common type of ID theft that year.
• The Miami-Fort Lauderdale-Pompano Beach, Florida, metropolitan statistical area had the most ID theft reports per capita, with 729 cases per 100,000 residents.
• Of 917,315 reported cases of ID theft, 30- to 39-year-olds made up 29.8% of victims in the U.S. Those in the 60-something age group experienced the biggest total dollar loss ($980 million) due to ID fraud.

» FTC FINDINGS: Identity theft statistics