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Credit-monitoring service looks like an improvement

NEW YORK — NEW YORK - Services that monitor your credit activity for signs of identity theft are about to start making sense.

Right now, if you pay for a service to monitor your credit files, it will read information from just one of the three major credit bureaus - Equifax Inc., Experian or TransUnion.

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Starting in November, privacy-protection company Intersections Inc. expects to launch a credit-monitoring service that tracks loan activity from all three credit-reporting bureaus in an effort to stop identity theft. Industry professionals predict similar products will follow.

Identity theft cost consumers and businesses $53 billion last year, the Federal Trade Commission said last week, with almost 10 million Americans falling victim to thieves using their name and other personal information, such as a Social Security number or bank and credit card numbers, to establish credit or buy products.

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So-called credit monitoring has been one of many products brought to market in recent years to fight the problem. Such services promise to detect identity theft - sometimes catching it before it starts - by notifying consumers of changes in their credit files.

A client will be notified about a credit-card application, for example. If that application wasn't prompted by the credit report owner, he or she might try to stop the application from being processed.

But being limited to activity from just one agency has prompted consumer advocates to denounce the product as a waste of money. Data between the three separate credit bureaus overlap only 80 percent of the time. So monitoring your Equifax report, for example, may not alert you to a fraudulent credit card application being processed with TransUnion and Experian.

There are competitive reasons that the three don't share information, said a spokesman for one of the credit bureaus.

To do it right, you would have to pay for credit monitoring from all three bureaus, a process that's likely to cost you at least $185 a year.

TransUnion's TrueCredit service is the cheapest, costing about $44 a year, but it only offers weekly alerts to credit file changes. Experian's Credit Manager costs about $80 a year. Equifax has two different services: If you want alerts within 24 hours, the cost is about $120 a year; $60 gives you alerts once a week.

The new service from Intersections will cost roughly $110 a year for people who sign up before Dec. 1. After that, the price will rise "a couple of dollars," but the final price has yet to be decided, said Ken Schwarz, chief operating officer of the Chantilly, Va.-based company.

Monitoring reports from all three credit reporting agencies is a push in the right direction, said Jay Foley, co-executive director of the Identity Theft Resource Center, a nonprofit in San Diego that helps identity theft victims. Foley had been among those who called credit monitoring a waste of money because of its limited capabilities.

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Intersection, which is offering the product under the company's Identity Guard brand, will monitor the three credit reports separately and combine the information for the consumer. Any address changes, new accounts opened or collections will be reported to the consumer via e-mail, regular postal mail or cell phone.

Interested consumers need to keep in mind that credit monitoring "doesn't stop you from being a victim," said Ed Mierzwinski, consumer advocate with the U.S. Public Interest Research Group in Washington. It will only tell you whether someone's using credit and loans falsely under your name. Identity thieves who steal your information to pay for utilities or cell phone, or to write counterfeit checks won't show up on your credit report.

Despite the improvements, Mierzwinski doesn't agree with credit monitoring. Successful products only encourage the credit bureaus to not resolve internal problems that facilitate identity thieves, he said.


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