Private Risk Advisor

I wish to remind all consumers that developing a plan to effectively manage the risks of a stolen identity is a critical part of any personal risk management program. Where to start? First, a few words of caution on where not to start. Beware of the large number of organizations offering to sell “identify theft protection services” to individual consumers. Discerning between the good (a few) and the not-so-good (many) of these offers is no small task. Rather than using the web to purchase a solution based on a few minutes of research, start instead with the two very basic questions that need to be asked and answered: What are the real consequences associated with a stolen identity? What can be done to manage the risks?

What are the real consequences? Much more than expense, think time and aggravation. There are numerous safe guards in place to protect individual consumers from having to assume the full responsibility of the costs associated with most forms of identity theft. Ask any identity theft victim, and you will quickly learn that the greatest consequences are having the time and expertise required to restore an identity that has been compromised. The Privacy Rights Clearinghouse estimates that the average victim spends the equivalent of 22 workdays trying to correct damage from this crime. There is no measurement for the amount of aggravation.

How to manage the risks? Minimize the exposure, and transfer the consequences. As with managing any risk, there are precautions that can and should be taken to minimize our exposure from those who would steal our identity. While learning the precautions is not difficult, practicing them consistently can be daunting. A good place to start is this government website, http://www.onguardonline.gov/ which provides a wide range of tips from the government and the technology industry on how to better protect your personal information and minimize the chances of having your identity stolen.

Another risk management strategy is to transfer the responsibility to repair a stolen identity to a third party. Providers of identity theft services offer two very different approaches, with two very similar descriptions: resolution and restoration. While resolution services provide guidance and handholding, consumer advocates warn that victims are often required to perform much of the actual work on their own, and observe that many of the “services” provided are available to the general public for free. Alternatively, those organizations providing restoration services perform the actual work of restoring a stolen, and cut through the many entanglements necessary to resolve all areas of identity theft, including financial, medical, social security, driver’s license, and character and criminal issues.

Summary: Consumers should be aware that the time and expertise needed to restore a stolen identity can be significant, and seek solutions that emphasize pre-event protection strategies and post-event restoration services. Often, such protection strategies and restoration services are available as a member benefit from select credit card providers or to the policyholders of a growing number of home insurance carriers.  As always, to learn more, give me a call or send an e mail.