A new report from the Government Accountability Office (GAO) took an in-depth look at identity monitoring services and their effectiveness. One conclusion from the report was ID monitoring services will not address all risks consumers face from data breaches.
GAO said in the report that it did not identify any studies that analyzed whether consumers who sign up for or purchase identity theft services encounter fewer instances of identity theft or detect instances of financial or other fraud more—or less—rapidly than consumers who take steps on their own. Ultimately, nothing stops the fraud from happening in the first place.
GAO also said that consumers are ultimately at risk because so much of our personal information is collected and available beyond our control. Additionally, criminals will use the stolen data for years after the breach takes place.
A prime example is the data breaches at the Office of Personnel Management in 2015. OPM had the personal data of over 22 million current and former federal employees in its databases which were compromised, leaving all of that data vulnerable.
What Can Consumers Do?
One option GAO noted in its report is to utilize credit freezes. As of September 2018, it is now free for consumers to freeze their credit at the three major credit reporting agencies (Equifax, Experian, and TransUnion). This prevents new accounts from being opened in situations where a credit check is required for opening the account.
Freezes have limitations as well though. They are a hassle (it has to be done separately at each of the credit agencies), they must be lifted if you need your credit checked for legitimate requests which can lead to delays in getting new services (i.e. a loan or credit card), and they do not prevent other types of fraud, such as tax refund theft.
It’s true that an ID monitoring service will only alert you to suspicious activity, but if your identity has in fact been stolen, you are left with the hassle of doing the cleanup work yourself.
Some ID services go beyond just monitoring and offer recovery solutions as well to fill this gap. Zander Insurance’s ID theft protection is one such plan. Lifelock also offers reimbursement for ID theft that happens when covered under its program along with resolution assistance. Utilizing a service like this can potentially offer consumers some additional protection and peace of mind.
OPM Data Breaches
As noted above, GAO pointed out that because so much of our personal data is now collected and stored by companies and government entities that it is always at some degree of risk. This was put on display by the OPM data breaches.
GAO provided some statistics in its report on the utilization of the ID monitoring services that the government has provided as a result of these data breaches.
As of November 30, 2018, OPM had obligated about $421 million for a suite of credit and identity monitoring, insurance, and identity restoration services to offer to the approximately 22 million individuals affected by its 2015 data breaches. As of September 30, 2018, about 3 million (approximately 13%) had used the services, and approximately 61 individuals had received payouts from insurance claims, for an average of $1,800 per claim.
OPM recently renewed its contract with ID Experts to continue offering the ID protection services.