With identity theft on the rise, is ID theft protection worth it? And how does it work?

SAN FRANCISCO (KGO) -- We've all heard of identity theft. Maybe you or someone you know has even been a victim.

Because it's on the rise, it's not surprising that companies are trying to cash in by offering identity theft protection services. Consumer Reports explains how the coverage works so you can decide whether or not it's worth the money.

Before you enroll in one of these services, Consumer Reports says it's important to know what you're actually buying. Some people assume that ID protection services will prevent identity theft in the first place. But that's not true.

You pretty much have to accept that criminals can get their hands on your personal information no matter what you do. The key is to spot fraudulent activity quickly and then do what you can to fix the problem.

ID theft protection services can help you dispute fraudulent transactions with your bank, credit card companies, and other businesses, typically for a fee of about $10 to $30 a month.

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The best way to avoid being a victim of this type of account fraud is to freeze your credit with the three major credit bureaus, Equifax, Experian and Transunion. It's free, and no one will be able to open an account, including you, until you unfreeze it.

But keep in mind that freezing your credit won't prevent all ID theft. For example, a criminal can still use your personal information to get medical services or steal your tax refund.

It's critical that you keep a careful eye on your financial world; bank and credit card statements, obviously, and medical, insurance, and tax records.

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Consumer Reports says if you're considering signing up for ID theft protection, ask a lot of questions. Some companies cover very little or simply hand you a do-it-yourself credit repair checklist. Another thing you should do in any case is to check your credit report free once a year with the three credit bureaus to spot any suspicious activity.

All Consumer Reports material Copyright 2019 Consumer Reports, Inc. ALL RIGHTS RESERVED. Consumer Reports is a not-for-profit organization which accepts no advertising. It has no commercial relationship with any advertiser or sponsor on this site. For more information visit ConsumerReports.org.

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