August 13, 2007, 7:00 am

The Insurance Against Identity Theft: From Whom You Need Protection Of

by: The Financial Blogger    Category: Insurance
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“Yes sir, your credit card is now activated with a limit of $5,000. But sir, have you thought about all risks involved if you lost this card? We have just created the perfect product for you…All of this offered for a very small annual fee of $25 that we can directly charge your credit card for. What is $25 a year to buy a peace of mind?” Well, the only potential thief in this situation is the customer representative offering this feature. Identity theft does not need additional protection. Here’s why:

You are already covered by law

In Canada, the consumer protection law the individual is held responsible for a maximum of $50 on their credit cards or debit cards. I would also add that most of the time, the financial institution will cover the full amount for the first time being. The process is fairly simple. The minute you notice that you might have lost your wallet or a credit card, you call your financial institution and they will freeze all access to funds. Another trick is to verify your monthly statements (I do it on a weekly basis on the internet) for any suspicious transaction.

The assistance centre provided with such insurance is superfluous

Companies that provide their clients with identity theft insurance claim they offer a 24/7 assistance centre in case of fraud. In fact this line will not get you anywhere. As previously mentioned, when you think you are victim of fraud by any means, you simply contact all financial institutions you are dealing with and advise them of the situation. They are very quick to stop and trace any transactions with your identity. It is a matter of second and everything is solved. Then, tell me what that customer representative from the assistance centre will do for me? Sell me more insurance for a future case?

Other costs related to identity theft are minimal

The amount covered by identity theft policies are in the range of 5K to 15K. It does include long distance calls, loss from days missed at worked and declaration cost. Basically, I highly doubt that you will spend 10K in long distance call to solve this problem. All institutions have toll free number. In regards to the declaration cost and days missed at worked, these cost can be avoided or, once again, minimal. This surely will not justify $25 yearly fees.

In fact, you are better off making sure that you keep your cards with you, that you do not have you PIN number in your wallet or your SIN number card number with you. Be aware of transactions in your accounts (you can use software such as Microsoft Money to help you out). With these little tricks, you should be fine and you will not require identity theft insurance.

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Comments

I am sure you use your credit card to pay for things, your personal data is kept all over the internet the point being there are tones of ways people can lose their identity and it’s not always about your financial institutions. Someone could use your name to commit a crime and etc. and what about all the restoration process? How will you get everything back to normal all the lawyer fees etc…. i know the specific product you are talking about does not cover all of that but there are products that do protect you against them, with identity theft being the fastest growing white collar crime I make this protection an essential part of my clients financial plan.

by: The Financial Blogger | June 9th, 2008 (5:35 am)

Ramis;
I don’t know about “advanced product” on identity theft that would cover what you mentioned. This could definitely be useful.

However, I don’t think that using my credit card everything put me at risk more than surfing on the net, going to the clinic, filling my tax income report… There are so many ways to get an individual’s personal info that I prefer not to bother to much about it ;-)

FB,

Yes there actually is a product that covers all of that and as well as some other legal matters. Almost all my clients have this coverage, although it is not available in ALL canadian provinces, Ontario is one of the provinces it is available. I do not want to put up “ads” on here if you want to know more email me.