Instead of a refund this tax season, some of us will find out that our taxes have already been filed...by someone else, trying to steal our money.
Consumer Investigator Danielle Serino has the story of a husband and wife who had their information stolen not once…but twice.
It’s one of the craziest stories I’ve ever heard, Danielle said. It's why some people pay for those services that promise to protect your identity. But people have been asking me, are they worth it? Well...let's hear what that couple had to say.
The couple didn’t want to reveal their name or faces. They were worried they’d have their identities stolen again.
Six companies they did business with all had data breaches several years ago.
So all of them provided ID theft protection...free of charge.
But a year after those breaches, when they filed their tax returns, someone had beat them to the punch.
“We got a letter saying the IRS was hacked, and they generated a PIN for us so it wouldn't happen again. But they hacked the pin numbers. That was the second time,” the husband said.
Their identity stolen two years in a row...from the IRS.
The FTC says no company can protect you 100%.
"Like any other crime there is always an opportunity for theft. There's always an opportunity to take your personal information," says Jon Steiger with the Federal Trade Commission.
What many of those ID Theft Protection companies do offer, is monitoring and recovery services. But much of that you can do for free or at little cost.
For example, you can monitor your own credit by ordering a free report every year from the three reporting agencies. You're entitled to them by law. They'll alert you if a new account is opened...even if someone just inquires about your credit.
You can also restrict access to your credit report, by putting a freeze on your accounts, which costs five to ten dollars per agency. If a creditor can't access your file, they generally won't open a new account or provide a loan without your approval.
To keep track of any activity on your accounts, you can sign up for transaction monitoring with your credit card or bank. Most will send you an alert for free when the card's used.
And if your identity is stolen, there are companies that will clean up the mess for less than ten dollars a month.
Then there’s the FTC website which will walk you through the process for free, providing pre-filled letters and forms for you to send to credit bureaus, businesses and government agencies.
So as for those companies you pay to protect you...at least for this couple,
“It's just not working. Whatever they're doing, I think these companies need to buckle down and find a way
to help the consumer,” said the woman.
Now what about those million dollar guarantees that some of these companies offer, to reimburse you for any money that's stolen. Well, know that your liability is limited if you report an identity theft to your creditors in a reasonable timeframe. Also some of these policies have limits and exclusions. And your homeowner’s or renter’s insurance may already protect you.
For more information:
To report and recover from Identity Theft: