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By Andrea Coombes

Buyer beware when choosing identity-theft-protection products
SAN FRANCISCO (MarketWatch) -- Plenty of products promise to help consumers avoid identity theft, but none of them is foolproof.
If a product claims to prevent identity theft, that should raise red flags for consumers, said Linda Foley, founder of the Identity Theft Resource Center in San Diego. "You can't protect a person from identity theft. It's impossible. All we can do is minimize our risk."

And, while these products can reduce your likelihood of becoming a victim, many employ methods that consumers can use on their own, for free.
Fraud alertsMany products offer to place fraud alerts on consumers' credit reports, so when a retailer or creditor checks your report in response to a request for a new credit card or financing for that plasma television, the fraud alert tells them to double-check that the person seeking credit is you. Ideally, the creditor delays extending credit until reaching you.
But alerts "are not the silver bullet that people are looking for," said Guillaume Deybach, chief executive of Europ Assistance USA, a Washington-based company offering travel aid and identity-theft assistance.

Drawbacks: Alerts focus only on thieves opening new credit lines in your name, not the use of existing accounts. Also, some retailers don't check credit reports before extending credit and those that do don't always try to reach you -- they may just ask the thief some easy-to-answer questions. Still, alerts increase the chance you'll be contacted if someone applies for credit in your name.

Consumers can call or go online to each of the three credit reporting agencies (Experian, Equifax and TransUnion) to place a fraud alert for free. "It's easier to do it by phone," said Paul Stephens, director of policy and advocacy for the San Diego-based Privacy Rights Clearinghouse. "It's faster, and you're not going to get as much of a sales pitch."
Generally, fraud alerts expire after 90 days. If you don't want to bother remembering to renew alerts, several companies, such as LifeLock, sell the service of placing alerts for you, for about $10 a month, or bundled into pricier packages that include other services.
Credit freezeAlternatively, you can place a credit freeze to lock up your report at each of the three bureaus, preventing new credit being extended in your name. This won't affect your access to current credit lines, but will delay your access to new credit (it takes about three days to lift a freeze). Freezes aren't advised for people in precarious financial positions who might need to borrow money in a hurry. But for consumers prepared for unexpected financial emergencies, a credit freeze is a powerful way to stop thieves.
Drawback: Freezes don't stop thieves tapping existing credit or bank accounts, nor do they address other identity theft, such as when a thief provides your name as his identity when pulled over for a traffic violation.
Consumers can freeze their reports by calling each of the three agencies. It generally costs $10 to place a freeze ($30 to freeze all three major reports) and $10 to lift each freeze (these costs are sometimes waived.) For more details, visit FinancialPrivacyNow.org.

Or, you can pay for a product that includes a credit freeze, such as offered by TrustedID and others.
Credit monitoringMonitoring products alert consumers when changes appear on their credit reports.

Drawback: There's often a significant time lag between credit activity and its appearance on your report. Still, monitoring may help you realize sooner that you've become an identity theft victim, enabling you to start resolving the issue before more damage ensues.
Consumers can do their own form of credit monitoring by requesting a free annual credit report from each of the three main credit bureaus on a rotating basis (one request every four months). Go to AnnualCreditReport.com.

Or, you can pay a company for the convenience of having alerts emailed to you. Make sure the company monitors all three bureaus.

Data-sweep servicesCompanies will scour the Internet for your personal information, alerting you to potential misuses of your identity. These services cover an array of online information, including real estate and criminal records. One example is MyPublicInfo's "public information profile," about $80 for one report and six months of access to their member resources.
Drawback: They don't prevent identity theft; they alert you when it might be happening.
"The fraud alert, the credit freeze, the credit monitoring, some of the tips to protect your information and identity, none of them are silver bullets, but all of them contribute to prevent it from happening and all increase your awareness when something is odd" with your accounts, Deybach said. "It's really about raising the awareness of individuals ... so whenever something happens they can take care of the issue and act."

Insurance and victim resolution servicesIdentity-theft insurance helps cover the costs associated with the crime. Your homeowners or renters insurance, or your bank account, may include such insurance already, so check before purchasing. Consumer advocates say the value of such insurance is debatable, since financial losses are often not extensive and credit-card companies generally cover consumers' losses.

Still, insurance could be useful if the policy covers debit-card losses and lost wages due to your time spent resolving the crime. Visit PrivacyRights.org for more on the risks of debit cards.
As for victim resolution services, some nonprofit and state agencies will help for free, though the services companies sell may offer valuable convenience. Visit IDTheftCenter.org for more information.

Protect yourself

Keep a close eye on your financial accounts, whether online or by monitoring paper statements, to be alerted quickly should you become an identity theft victim.
If you prefer plastic to cash -- and you've got discipline -- use a credit card instead of a debit card for purchases. Credit cards come with stronger consumer protections.
To avoid identity thieves online, keep your computer protections up-to-date, including antispyware and antivirus programs, and don't click on links in email messages. Avoid unsecured Wi-Fi networks unless your computer encrypts transmissions.
Don't save passwords on your computer, and turn on password-protection features for your portable devices.

Lock up sensitive financial information stored at home.
Talk to your kids about refraining from posting an abundance of private information on social-networking sites, and do the same yourself.
Avoid leaving sensitive data in your car, where it could easily be stolen.
Use post office mailboxes to send mail, and shred documents before tossing. Read More......

Identity theft has become a huge problem in the United States. The FTC recently reported that identity theft was the number one complaint again last year for the eighth consecutive year! There are literally thousands of scams out there, and you're probably familiar with most of them, but new scams are getting more sophisticated as people get savvier. For this reason, I thought I'd highlight some of the newest scams making the headlines.

Here are the top five scams you may not know about:

Tax and Rebate Scams

The Scam: Consumers get a call or e-mail claiming to be from a government agency, such as the IRS or Social Security Administration, that asks for personal information to process a rebate check. These crooks ask consumers to provide personal information like their social security number, bank account number, or other details they can use to commit identity theft. If they resist giving out information, they're told they cannot receive the rebate unless the information is provided. The Don'ts: Never give sensitive information to anyone over the phone or email. If you get a suspicious email, delete it immediately. Don't click on any links either, for they might take you to a phishing site or install spyware on your computer. Keep in mind that most government agencies don't collect information by phone or email. The FTC recommends you contact the IRS or SSA directly if you have any questions or concerns. To learn more about other tax scams check out the IRS Top 2008 "Dirty Dozen" Tax Scams.

Cheap Electronics Scam

The Scam: Shopping website that appears legit sells electronic products at extremely low prices. The site is so sophisticated, even the most savvy consumer will have a hard time telling it's a fake. One recent article on PCMag, mentions these scamming sites may be part of a bigger network, since they all have a $500 minimum purchase requirement, and may ask for payment in the form of a Western Union money order to be mailed to a foreign address.
The Signs: Things a like a foreign address, a $500 minimum purchase, or the lack of a secure payment transaction form should raise red flags. A site may appear legitimate, but if you have a hard time recognizing the validity of the website, watch out for things like a new domain registration, questionable contact information, grammatical and spelling errors, a no return policy, and untraceable payment methods. Do do some research online because chances are others may already be expressing their concerns on forums or blogs.

Chatroom Scams

The Scam: Russian cyber-crooks have developed a software robot that poses as a human in chatrooms. These bots can chat with up to 10 people simultaneously, and easily persuade them to hand over phone numbers, photographs, birthday, address, and other personal information. The site claims "Not a single girl has yet realized that she was communicating with a program!" Information harvested by these bots can be used by fraudsters to carry out various forms of fraud. Unsuspecting victims may also be tricked into visiting a 'personal site' that could load malware onto their computers. Sergei Shevchenko, Senior Malware Analyst at PC Tools said CyberLover, "employs highly intelligent and customized dialogue to target users of social networking systems. It can monitor Internet browser activity, automatically recognize and fill in the fields in the web pages, generate keystrokes and mouse clicks, and post messages, URLs, files and photos."
The Dont's: Common sense says never, ever give out personal information to anyone you just met online.

Local Charity Scams

The Scam: Fraudsters claiming to be from the local police department or DARE program are calling or approaching private citizens and businesses soliciting donations purporting to benefit police officers. What's convincing some people into handing over personal and financial information to these imposters is the spoofed number that pops up in the caller ID. Police say many victims have reported a phone number that appears to be from the local police department, so don't be fooled.
The Do's: If you want to support the local police or fire department, find out when they hold their annual fund drives. Most departments don't solicit donations via telephone, so it's best to check out their site to find out when and how they seek donations.

Cancer Cure Scam

The Scam: As more people turn to the web for medical advice, they're encountering websites that advertise natural products they claim will prevent or cure everything from cancer to diabetes. Scammers know people are searching for natural remedies online, so they exaggerate the language on their site, and even add a few medical terms to sound legitimate. Oftentimes, they'll claim their supplies are not sold anywhere else, and sell them at a high price. Unfortunately, there is no such thing as a miracle cure for cancer, but these scammers will have you believe there is, and will even discourage you from taking real medicine. The reality is many of these products are not proven, effective, or safe, and the sites are full of false testimonials.
The Do's: Canada has already started to crack down on such sites, demanding they remove any false claims quickly. Andrea Rosen, Acting Deputy Commissioner of Canada's Competition Bureau, says consumers should be skeptical of health-related products or services that look too good to be true. People should talk to their doctor before trying any new treatment. Check out the Anatomy of an Online Health Scam before you buy medicine online.

Read More......