Needless ID theft protection

Published On: Feb 17 2012 06:54:28 AM EST

It can be frightening when someone steals your financial information and goes on a shopping spree. That fear has helped drive sales of identify-theft protection services.

Americans are spending an estimated $3.5 billion a year on these services. But Consumer Reports says save your money!

Consumer Reports Money Adviser says the rate of ID theft is actually declining and found the companies often overstate the risk and puff up the power of their services.

Consumer Reports Money Adviser looked at nearly two dozen plans that cost $120 to $300 a year. It turns out you can do much of this monitoring yourself for little or no cost.

Start by getting your credit report free, once a year, from each of the three major reporting agencies, Experian, Equifax and TransUnion. Look them over for anything suspicious.

Next put a security freeze on your file with the same credit agencies. That blocks access to your credit report and makes it more difficult for a crook to get new credit in your name.

Also sign up for free alerts from your card issuer. These red flag higher-than-usual charges on your accounts. And routinely check your credit-card statements for unauthorized purchases.

See Consumer Reports' report on identity theft protection services and free ways to protect yourself.