The Checkout

Credit Monitors: A False Sense of Security

Credit-monitoring services are not all they're cracked up to be, the New York Times reported yesterday.

Credit monitoring has become a lucrative business for the big three credit reporting agencies and large banks as consumers try to protect themselves against identity theft. The big three typically sell consumer credit data to big banks for 20 cents to $1 per report, the Times reported. That same information -- your information -- can be repackaged and sold to you for credit-monitoring purposes for $3 to $16 per month. Wall Street analysts estimate credit monitoring is a $900 million business that will grow 20 percent a year or more.

More than 12 million Americans have signed up to be notified when lenders request their credit files. Credit monitoring is supposed to act as an early warning system. If you can't stop someone from using your identity to obtain credit, then at least you can find out about it sooner and contain the damage.

The Times story, however, focused on a major weakness in the credit-monitoring system that sellers of these services don't bother to mention in television commercials or online banner ads: The services don't work if someone uses your Social Security number to get credit in his or her name.

The story featured the travails of the Milletts, a couple from Overland Park, Kan., who subscribed to credit-monitoring services from all three major credit reporting bureaus: Experian, Equifax and TransUnion.

All three failed to alert them when an imposter used one of their Social Security numbers to apply for 26 credit cards, finance several cars and take out a home mortgage.

The problem arises because of the mismatch between the Social and the wrongdoer's name. The credit reporting bureaus route the loan request to another file, so even if it has your Social on it, it won't show up in your file.

Donald Girard, an Experian spokesman, admitted to the Times that his company's credit-monitoring products could not detect cases in which a credit applicant used someone else's Social Security number but his or her own name because those records are stored separately.

So where does this leave consumers?

As we've said here before, consumer groups generally see these services as a waste of money. You can monitor your credit yourself or ,depending on where you live, freeze your credit. offers an easy-to-read comparison of five options, including credit-monitoring services.

Has a credit-monitoring service ever failed you?

By Annys Shin |  December 13, 2006; 9:25 AM ET Credit Issues
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I have used three credit monitoring services in the past three years. My mortgage check was stolen from my mailbox and the crook washed my check and then bought large-ticket items at Lowes and Home Depot. The identity theft company was totally useless..sending me forms to fill out for the police and credit bureaus that my credit union made me fill out anyway. The latest monitoring service I signed up for from Citibank gave me the same credit reports I obtained free from each of the three bureaus but were not as detailed as the actual credit reports from Experian, Equifax, and TransUnion. I canceled the service with the customer service rep trying to change my mind every step of the way by repeating features of the service I didn't even care about. I finally had to firmly insist that my account be canceled or I was going to file a complaint. All these services want is your monthly fee, but when it comes to giving you unique information that you could get yourself for free they fail miserably.

Posted by: Chris Larson | December 13, 2006 10:21 AM

Huh? Annys, I'm confused. If your SSN and name are both required for a particular file, then how does someone using your SSN and THEIR name affect your credit? Do you see what I'm saying?

I mean, the Milletts didn't find out about the other person using their SSN because the other person used his/her own name with their SSN. So, it ended up in a different file. If it's in a different file, then how does it affect their credit?

Please explain this issue!

Posted by: Ryan | December 13, 2006 11:22 AM

I singed up for one to get the free credit report and forgot to cancel. In the mean time I applied for new jobs and security clearances that did credit checks, ended up switching jobs and had to cancel my business credit cards and open new ones, never got a notification.
After that I canceled because if they don't notify me of legitimate changes how can I know that they'll notify me of fraud.
Now I may be an idiot but I have a hard time figuring out how to do my free annual check without having to sign up for a plan and then remembering to cancel.

Posted by: dc | December 13, 2006 11:38 AM

How can it be that easy to use someone esle's SSN with a wrong name?! Don't credit reporting agencies raise red flags in these cases?! They must be required to do so!

Posted by: Elle | December 13, 2006 11:49 AM

I agree with Ryan. The credit monitors don't detect someone applying for credit using my SSN and their name because that application doesn't appear on my file.

Well, if it isn't on my file, why should I care about it to begin with?

Posted by: Lenny | December 13, 2006 12:09 PM

The credit companies may not keep the files together, but if someone pulls your credit for a job, mortgage, etc they will pull by your social and it should pull everything with that social regardless of the name, that's the only way that someone could catch it.

Everyone should pull their credit reports since you get one for free. What I've seen suggested is that you pull a different report every four months (eg. experian in Jan, equifax in april, etc) so you can check. After all, there are illegals out there working under a SSN that doesn't belong to them, so somebody's gettin scammed.

Posted by: name mismatch | December 13, 2006 12:41 PM

Hey dc -
www(dot)annualcreditreport(dot)com is where you can request your credit report. I believe Caroline Mayer mentioned it before when she used to write this blog, so check the archives to verify it for yourself.

I also believe that freecreditreport(dot)com is the one where you have to sign up for something.

Posted by: JB | December 13, 2006 1:43 PM

I think everyone, anywhere should be allowed to freeze their credit. It might inconvenience me from time to time but it would be worth it.

Posted by: John | December 13, 2006 1:44 PM

Something like this might not affect your credit now, but almost certainly will create major problems in the future. These credit monitoring programs seem like a rip-off to me.

JB, you are correct. is the place to go to get your credit reports for free. Everyone is entitled to access their free credit reports once a year through this website. Each of the three credit agencies will try to sell you something as you access your reports, but you can bypass these offers with no penalty.

Posted by: Stephanie | December 13, 2006 1:56 PM

Once again, great post, Annys. You have been on this story long before the Times.

It is just unbelievable that in addition to only being able to catch fraud months after the fact, credit monitoring services can't even detect a good portion of it.

I am so glad that mainstream publications like the Post and now the New York Times are educating the American public about these nearly worthless services.

As I always say when I post here, "credit monitoring services are a rip off!" (Read why and find free alternatives on my web site: ).


Posted by: Jeff | December 13, 2006 2:03 PM

Is the site we can go to get free annual checks.

Posted by: SallieMae | December 13, 2006 2:17 PM

Credit report fraud is easy to stop - allow consumers to freeze their reports.

The CC bureaus have fought this because (1) they make money selling your report without your permission and (2) they make money "protecting" you by monitoring the fraud they enable.

It reminds me of Microsoft selling virus protection or the neighborhood arsonist selling fire insurance.

Posted by: Bill | December 13, 2006 6:58 PM

Credit monitoring is only one leg of a Three legged stool. One needs Monitoring along with a Restoration service and access to an attorney too. Check this information out www(dot)TakeaLook(dot)Info

Did you know there are 5 areas of Identity Theft?

Certifed Identity Theft Risk Management Specialist

Posted by: Bruce | December 14, 2006 9:43 AM

The banks have spent a lot of time and effort to convince us that we should be concerned when they give money to the wrong person. Their success is a major milestone in business for this century. The consumer victory will be when we convince them to do their work and know who they are giving money to.

It is not my fault.

Posted by: Gary Masters | December 14, 2006 9:46 AM

Thank you, Gary Masters, for not bending over for the credit bureaus! They've completely spun the debate so it's supposed to be OUR problem when THEY ruin our credit rating or even our finances.

Annys, I know you're new to this beat, but I'm very surprised you didn't ask if anyone (other than the credit bureaus and other parasites) has ever actually benefited from credit monitoring.

Posted by: The Cosmic Avenger | December 14, 2006 9:55 AM

Back when I was wet behind the ears, I signed up for Privacy Guard. Mostly did it to get the credit on my credit card, but once I had it, it didn't do squat for me. Open a new card? Not one phone call. Note a different spelling of my name or wrong SSN attached to my report (which I scanned myself)? Nary a squeak from this so-called monitoring agency. Even worse. when I called to cancel, I had a 4 month long ordeal of calling and calling to get them to refund my money after cancelling my service.

Never again! I use the only worthwhile credit monitoring service there is: my own two eyes and my brain. I also request my credit report free every four months so I have a year's worth of reports from

Posted by: CyanSquirrel | December 14, 2006 4:12 PM

Responding to Ryan....

That is because the creditor, sometimes only allow one holder of the SSN to be in their data, when the "real" holder shows up after his place has been taken. He he is denied access to those potential credit markets using his very own SSN. That is how it affects your credit, this happens even if you have a PERFECT credit report and high score.

Posted by: Anon | December 14, 2006 11:49 PM

I think the poster above made this same point, in slightly different language, but here goes:

Let's say you have a terrific credit history and, after much comparison, find that Bank of Fredonia will offer you the best rate on a new mortgage. You apply for the mortgage confident that you will be approved. They call you back: sorry, no can do, you already have a mortgage with us. Perhaps you lose out on a house you really wanted; you certainly have not-much-fun trying to get everything straightened out with Bank of Fredonia that you do NOT have a prior account there, etc.

Or, worse:

You file your taxes like a good, conscientious citizen. You made $60,000 last year and are owed a refund of $2000. A few weeks later, you get a call from the IRS. Not only are you not getting your refund, the friendly tax man would like to know why you are underreporting your income by $45,000! What?!? The answer: someone else is using your social security number to work illegally. You dang well better get a lawyer fast, or at least get ready for a very unpleasant round of prove-your-existence with the IRS.

Your social # touches on so much more than credit. I feel so sorry for the poor folks in the NY Times article. I wish there was a better method in place for preventing this type of fraud.

Posted by: Anon II | December 15, 2006 3:58 PM

We need to let our politician's know what's important to us, write to them/ email them. Tell them to tighten up on the penalties for people who steal our IDs and get companies to STOP using our SSN, ie health insurance, dental insurance etc. If everybody makes a fuse about giving out our SSN, then maybe things will start to change.

This is only going to get worse before it gets better.

Posted by: Ren | December 17, 2006 11:04 PM

re: somebody else using your SSN but their name. "name mismatch" has it right. Here's the deal. When you get your own credit report (and is the correct site for that; is run by the credit bureaus and requires payment and the FTC has sued them over it), you are getting your exact credit report, based on your name and SSN. When a company pulls your credit report, however, the credit bureaus generate a report using "fuzzy logic," i.e., a computer system that sees if there is information that may or may not be related to you because of similar name or same social. So when someone who actually wants to use your credit report pulls it, the credit of the person using your SSN will also show up. And unfortunately there's really no way for you to find out what is on your "real" credit report--the one everyone else sees. So, in fact, your credit is very much affected by this situation, but not in any way that you can find out about or do anything about. It's frustrating.

Posted by: lawyer in the field | December 19, 2006 4:53 PM

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