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Is Identity Theft Insurance Right For You?

by Brian Heap (WICHITA, Kan.)

Identity theft remains the fastest growing crime in the country, according to the Federal Trade Commission. In Sedgwick County, consumer fraud experts say 63 people have reported their identities stolen this year. That's an increase of nearly 30% from a year ago. The popularity of the crime is leading to increased interest in services such as ID theft insurance. But our FactFinder 12 investigation shows before you buy a policy, you should do some homework.

Criminals will stop at nothing to find personal information that can be used to steal someone's identity. They've been know to sift through garbage in search of documents containing a person's birthdate and social security number. During our investigation, we gathered about a dozen bags of trash from various Wichita businesses. We found some bags that contained shredded documents and some that contained valuable information that could be used to steal one's identity.

We found patient lists for Kidspace pediatric Dentistry, which included names addresses and telephone numbers for patients. Office manager Julie Le declined to be interviewed for our FactFinder 12 investigation but sent a statement thanking us for bringing the issue to her attention.

"Our office is extremely concerned with and sensitive to our patients' privacy and the privacy of their records. Our policy, of which we inform our employees, makes it clear that all patient reports are to be shredded before they are disposed of. In addition, we do not print patient reports which contain Social Security information. Please be assured that the disposal of unshredded reports is against our office policy, and we believe this to be an isolated incident. We take patient privacy and record confidentiality very seriously, and have used this experience to re-instill in our employees our policies and expectations," Le wrote.

A bag of trash that was discarded by a Pizza Hut office in Wichita had the recipe for identity theft. It contained paperwork for three employees of two Pennsylvania franchises. The documents included names, social security numbers, addresses and birthdates.

"That's my son. That's my son in Wichita, Kansas, a place he's never been to...has no affiliation with whatsoever and right there's all his information. I'm outraged," said Michelle Reese, the mother, of an 18-year-old delivery driver whose information we found. "I'm so grateful that you have decided to take this on and investigate this because had you not, we wouldn't have known and the other two people wouldn't have known," said Reese.

We showed our findings to the owner of the Pizza Hut franchises. Jim McNerney, Jr. declined to speak on camera but said in an email that he was taking steps to resolve the problem. "We take the security and privacy of our employees personal information seriously and we regret that three of our employees could have been exposed to a potential risk. In response, we have changed our internal procedures to ensure it does not happen again. We will be offering to provide one year of credit monitoring to the affected employees," the statement read.

Experts say you must do more to protect your identity than just shred important documents. One option available to consumers is identity theft insurance. Many of the big name companies that provide car and home policies offer ID theft policies for between $25 and $60 a year, according to the Kansas Insurance Commission. Read the fine print on ID theft policies because consumers experts say they may not not really offer you the protection you're looking for.

Federal Trade Commission Tips on ID Theft Products

"It's my understanding that most of those products do not restore the money that was lost. They may reimburse you for time spent in terms of the activities or efforts it took for you to try and correct the situation and most of the time there are caps on that," said attorney Sharon Werner of the Sedgwick County District Attorney's Consumer Fraud Division.

State insurance officials say most ID theft insurance policies will not reimburse you for money that's stolen. Instead, the policies will pay you back for the time and money you spend trying to reclaim your identity, including lost wages up to a certain amount. Also, You should find out if the policy has a deductible and check your homeowner's policy because it may already cover you.

Kansas Insurance Commissioner on ID Theft Insurance

Experts say the decision on ID theft insurance is up to the individual, but they say there are a number of free options available that will protect you just as well. They recommend routine searches of credit reports. And if your information has been compromised you should place a fraud alert or a freeze on your credit reports.

Kansas AG's Identity Theft Recovery Kit