This is where your finance takes place

“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.