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Credit Monitoring vs. Identity Monitoring

Today, data breaches are a frequent occurrence. Often with the disclosure of each breach comes an announcement of credit report monitoring for affected individuals for a certain time period. So what does credit monitoring really provide? Identity protection, peace of mind or simply customer goodwill?

Credit report monitoring is the checking of one’s credit history in order to detect suspicious activity or changes. Companies that provide credit monitoring typically will alert the individual to activity tied to his or her social security number, such as credit inquiries, delinquencies, negative information, employment changes and new accounts. So why does credit monitoring fail to provide identity theft protection?

1. First, individuals can receive a free credit report on an annual basis. The three credit reporting agencies, Equifax, Experian and TransUnion, have set up the following internet website, through which individuals can request free copies of their annual credit reports: https://www.annualcreditreport.com/cra/index.jsp.

2. Secondly, criminals will wait at least one year and one day in the brokering or use of stolen data if the company that sustained the privacy breach offers one year credit monitoring.

3. Third, credit monitoring primarily serves to alert, after the fact, the opening of new accounts. In turn, it typically does not warn the individual of changes with their existing credit. Hence, to the extent the persons’ current credit ratings have been adversely affected by the malicious acts of a third-party, they may go unreported and be unknown to the person whose credit has been impacted.

4. Fourth and most importantly, credit monitoring fails to protect against the malevolent conduct listed below, as outlined by the non-profit Identity Theft Resource Center:

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