It’s not if you will become a victim, it’s when…

What is identity theft?  Identity theft occurs when someone uses a person’s name, address, social security number, driver’s license number or other unique identifier to pose as the individual for the purpose of making financial transactions, executing contracts, obtaining access to confidential information or committing crimes.  The United States Department of Justice states identity theft and identity fraud "refer to all types of crime in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic gain."

In today’s market, there are severalkey components available to manage the problem of identity theft

• Recovery – The most important component in any identity theft solution!  Sometimes also called restoration or resolution, it is the process of returning all records that have been fraudulently affected by an identity thief’s actions to the way they were before the fraud was committed.  These records could be credit reports, financial records, wage and earnings reports, driving records, or criminal records.   

• Credit report monitoring - An important part of a total protection strategy.  But it is not an identity theft solution, as it is sometimes portrayed by marketers.  It will not prevent identity theft, nor will it resolve any issues for you if you fall victim to the crime.  It is the only early warning system that currently exists to tell you if a thief is working behind the scenes, which can save precious time and prevent further damage to your good name.  Without some kind of credit monitoring, you may not be aware that a criminal is operating in the shadows for months, perhaps years.  But, credit monitoring is not 100% foolproof. 

• Identity Scoring - Identity scoring involves the scanning on a regular basis of over 1000 databases to look for anomalies in the use of a person’s name, social security number and address, alone or in any combination with other personal data.  Each month the system provides an identity “score” that will indicate whether or not a person is likely being set up for identity theft activity.  With this system, it may be possible to stop identity theft before the damage is done!   Accordingly, this service is becoming one of the key components in the fight against identity theft damage.

• Expense reimbursement - This insurance component is sold with various coverage limits from $1500 to $20,000 or more.  While this is, too, a valuable part of the overall strategy, it is not a solution.  The insurance benefit only reimburses you for expenses that YOU pay in the course of recovering your identity.  It does not cover losses incurred as a result of the thief’s activities, but then, identity theft victims do not suffer significant financial loss.  That only happens if you are the victim of a scam – when someone poses as a real person or company and convinces you to part with your money or property voluntarily.  That is why the next component is also important.

• Education – Law enforcement says being informed and taking responsibility for safeguarding your personal information is the best prevention you can practice.  Look for programs that allow you to access current information, receive newsletters or alerts.
  
  

Each of these components comes in many different variations, with price tags to match! 

Whether you are a business looking to help your client, customer, member, or employee or you are a consumer seeking to do all you can to protect your good name, ask these questions about the solution you are considering:

1.  What kind of recovery (resolution or restoration) is included in this solution?  Not all recovery solutions are created equal.  Consider that there are 4 kinds of recovery.

1. Limited Event Recovery
1. Covers Only An Account or Credit Card – other forms of IDTheft not covered
2. Provides Generic Advice
2. Assisted Recovery
1. Provides Generic Advice
2. Forms packet – victim must do the work
3. Semi-Managed Recovery
1. Advocates Provide more detailed advice  
2. Three-Way Calling – Victim must still participate in the effort
4. Fully Managed Recovery
1.  Assigned Personal Advocate
2.  Personalized Recovery Plan
3.  Limited Power of attorney means no legwork for the victim
4.  Assures Completed Recovery

2.  How many of the key components are available in the solution?  A complete solution will include all of these components.  But if you have to pick one component – make it fully managed recovery! 

3.  How much will it cost?  Can I cover my family, too?  Comparison shop for components and price.  And be sure your chosen solution offers the opportunity to cover family members.

4.  What are the “fine print” exclusions?  Many plans will exclude family fraud or fraud that arises as a result of a terrorist act.  Be sure to ask about exclusions.  After all, fraud committed by a family member is extremely common.  Other exclusions may include:   (1) self-employed persons, (2) children not living at home (such as college students), (3) children under 18 (small children can be victims too), and (4) domestic partners. 
Situations that may trigger an exclusion include unknown pre-existing identity theft events, which may occur when an individual becomes eligible for the service, only to find out at that time that they are already a victim.  Your Service Provider should cover this situation if it was unknown to the victim at the effective date of the service.

5.  Does the service utilize a limited power of attorney to get the job done?  If you have ever purchased a new car, chances are you signed a limited power of attorney that allowed the dealer to obtain a title for you.    Some identity theft services companies who do not use a limited power of attorney try to scare people into believing that there is more risk with this process.   The real question is “Why DON’T you have a limited power of attorney process?”  Does the Service Company fear that their employees will perform in a manner that would cause them liability if they were committed to perform responsibly under a legal contract? 
Utilizing the limited power of attorney allows the Service Company’s Advocate to perform tasks related to the discovery and repair of damage done as a result of the identity theft, without the burden being placed on the individual victim – which is the service that most people value.  If an individual does not wish to sign a limited power of attorney form, he can still be taken through the process, but will need to handle the research, phone calls and correspondence himself.

For a look at how NXG’s programs match up to these plan guidelines, click here if you are a consumer
OR
Click here if you are an organization looking for program solutions for your employees, customers or members.

Have more questions about Identity theft solutions? Contact Us.