/ Money

Identity theft insurance isn’t worth forking out for

Identity theft paper being shredded

When I see an advert for a card protection policy it goes straight in the bin. In my mind, there are much better things to spend £70 on than a policy I already get for free and which I’m unlikely to need to claim on.

The fact is – identity theft is actually pretty rare. Providers will play on our fears of being a victim, but in reality, actual cases amount to probably less than 0.5% of the adult population each year.

Of course, if you’re unlucky enough to become a victim of ID theft it can be very distressing and a right pain to sort out. But the solution probably doesn’t lie in one of these policies.

You can get most of the benefits for free

Lots of the so-called ‘benefits’ these policies offer can also be done cheaper or for free yourself, or aren’t worth shelling out for in the first place.

For instance, keeping an eye on your credit file is easily done and you won’t have to pay £70 for the privilege. Just pay £2 to each of the three credit reference agencies and you’ll get your statutory credit report in return.

This is just one of the five reasons why you don’t need identity theft insurance highlighted by new research from the Which? Money team. You also don’t really need to pay for £100,000 fraud cover, impressive though it may sound, as you get free cover under the Banking Conduct of Business Rules and the Lending Code.

Simple actions to protect yourself

And of course, there are lots you can do yourself to minimise the chance of becoming a victim in the first place. Simple things like; taking care of your personal information, not telling anyone your passwords or PINs, and never, ever responding to unsolicited emails or calls asking for your bank details.

These tips should all help ensure that the only person who ever uses your personal details for their own financial gain, is you.

George says:
31 March 2011

This makes interesting reading.
Not only has Rebecca got her facts wrong (ID theft insurance policies give you £60/75k insurance, maybe she confused this with Card Protection?), but she missed the point that despite the low risk it costs thousands to get it sorted in legal advice, phone calls, and lost wages over several months (my aunt had her case going on for almost 2 years) and then add access to a credit file and cifas, id say its pretty bloody cheap if you did fall victim. Maybe let a customer decide for themselves what is best for them eh?