Should You Pay for Identity-Theft Protection? Ask Yourself These Questions First.

Betty Q. Hixson

Identity theft is becoming a more pervasive problem, with nearly 1.4 million reports of identity theft received by the Federal Trade Commission in 2021. That’s on par with 2020, but about double the number reported in 2019.

Given this trend, more people may be weighing paid services to help monitor for, protect against and clean up issues related to misuse of credit and compromised credentials. While paid services can be useful, there are several things consumers should ask themselves before going down this road.

Why might I consider a paid service?

A number of banks and financial services companies offer credit-monitoring services free to customers, and sometimes noncustomers, generally on an opt-in basis. But they may not offer certain protective features that paid services do. Free offerings often don’t include perks such as identity-theft insurance and remediation, and some free services monitor only one or two of the three major credit bureaus, whereas paid services generally offer an option that tracks all three.

Consumers could also take protective measures themselves, like freezing their credit or their children’s credit to prevent unauthorized use. But many don’t want to deal with the hassle. They may also prefer to pay for more comprehensive features or higher levels of protection.

Credit monitoring can be compared with housekeeping, according to

Bruce McClary,

senior vice president of communications for the National Foundation for Credit Counseling, a nonprofit financial-counseling organization. While people generally are able to clean their own homes, some don’t have the time or don’t enjoy doing it and can afford not to, he says. 

Who offers these services?

There are a variety of fee-based providers, including cyber-protection companies, insurers and each of the three major credit-reporting bureaus—


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Some of these providers also have free offerings, so be sure to research the differences in the plans. 

What services do paid credit-monitoring companies provide?

Generally, these services monitor the use of your personal information from a variety of sources. This could include one or more of the three major credit bureaus, your bank accounts or Social Security number, social media, court records and the dark web—information that is not accessible by normal internet browsers.

A number of companies also offer breach-related restorative services, to help if a consumer’s identity is compromised, and some also offer insurance for stolen funds. Some services have plans that cover children, which can be important given that child identity fraud costs U.S. families close to $1 billion a year, according to a November 2021 report from Javelin Strategy & Research.

What do these services typically cost?

Costs can vary, but generally consumers could expect to pay about $7 to $35 a month, depending on the provider and the features of the plan chosen. Consumers need to pay attention to the particulars because while providers may offer similar monthly or yearly fees, the features offered may be notably different.

What factors should I consider when choosing a provider?

Before signing on with a paid service, consumers should at least check to see if they are eligible for free credit-monitoring services resulting from settlements from high-profile data breaches, and what features are included. During the coverage period, these free services could make a paid service less compelling for some consumers. When the free period expires, consumers can then re-evaluate the merits of a paid service.


What experience do you have in dealing with services that protect against identity theft? Join the conversation below.

Consumers thinking about a paid service should consider cost, the provider’s reputation, how many people are included in a plan and whether family plans, if desired, are available. Consumers thinking about a paid service should consider cost, the provider’s reputation, how many people are included in a plan and whether family plans, if desired, are available. And, of course, how the service differs from free offerings that may be available.

Be sure to compare the scope of information being monitored. Is the provider monitoring only one or two bureaus or three? Does it offer dark-web monitoring? Does the provider track new uses of your Social Security number or bank-account numbers? If you’re a homeowner, does the provider offer home-title monitoring? What about change-of-address monitoring to identify instances of thieves rerouting a victim’s mail? Consumers should also consider the availability of features such as identity-theft insurance and identity-restoration services after a breach.

Also be sure to read the terms of service carefully so you understand what you’re signing up for, as well as the provider’s cancellation policies and its policies with respect to mandatory arbitration in the event of a dispute, says

Martin Lynch,

president of the Financial Counseling Association of America, a nonprofit that offers free or low-cost counseling to consumers.

Does paying for a service guarantee I won’t be a victim of identity theft or credit fraud?

Nothing’s guaranteed. But paid services can help you identify issues quickly, before they spiral out of control. “Real-time notifications that may be possible through some of the credit-monitoring services are really one of the primary benefits for people who choose to pay for these services,” Mr. McClary says.

Where can I find information about providers?

A Google search for “credit monitoring services” will point you to several of the best-known companies and can serve as a springboard for further research. Be sure to search for complaints against providers you’re considering in the Consumer Financial Protection Bureau’s Consumer Complaint Database.

Ms. Winokur Munk is a writer in West Orange, N.J. She can be reached at [email protected].

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