Credit Monitoring

Most people focus on credit monitoring to deal with the identity theft problem. Although this is a good practice if performed consistently and diligently, credit report monitoring doesn’t help prevent identity theft but it rather helps detect identity fraud after it has occurred. Credit report monitoring must be a component of an effective identity protection plan but credit monitoring alone is not sufficient to prevent identity theft or detect identity misuse in other areas such as health identity theft or employment identity theft. For example, if someone used your identity with a fake insurance card to get expensive medical help at your expense, you will not detect it through credit report monitoring. In this case, we can only hope that businesses validate a person’s identity through more than just one piece of personal information and send you a medical statement which will help you detect the fraud.

One of the problems with credit report monitoring aside from the fact that it is an insufficient measure for a total protection against identity theft is that consumers either don’t review their reports for suspicious activities consistently or don’t review the information properly. Credit report monitoring is a time consuming and challenging task. Most people are not disciplined enough to order and review their credit reports to detect unauthorized transactions. But even if they managed to review their reports, what is the best review interval? Should consumers review their reports every week, month or year? I hate to say this but unless credit report monitoring is automated and only used or updated with consumer authorization, credit reports must be reviewed at least daily for effective and timely fraud detection which is not practical at all. Notice I mention the word timeliness because shorter review intervals will detect a fraud faster which can otherwise be undetected for a longer period of time leading to additional pain and suffering.

I also mentioned that consumers may not be effectively monitoring their credit reports. Most people are not educated and trained on how to review their credit reports. Therefore, I can assume that credit consumers don’t have the appropriate skill set to review their credit reports and detect identity fraud. In conclusion, not only credit monitoring is not a total solution for identity theft, but longer review intervals and ineffective monitoring can also lead to poor identity theft detection controls.

If identity fraud detection is part of your overall identity protection plan and I think it should be, you should look for automated services. There is no shortage of companies selling credit reports these days but you should pick the ones that send you email or text alerts informing you of major updates to your credit report and personal information. The automated process in the detection phase not only saves consumers time for reviewing their credit reports but it also helps detect potentially unauthorized transaction immediately and effectively. Of course, the automation doesn’t take away the consumer responsibility for validating the alert to ensure the transaction was authorized.

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