In 2013, Javelin Strategy and Research revealed that 23.3 million U.S. consumers bought products to protect their identity, spending billions of dollars in the process. Are they getting what they paid for? Too often the answer is no. According to the Federal Trade Commission, deceptive marketing practices are all too common within the industry.
Forming a partnership with the right fraud protection provider is vital to both your customers and your brand’s integrity. When searching for fraud protection services, follow these five tips to get the most added value from your partnership:
Tip 1: Beware of overblown insurance promises
While it may seem reassuring to promise customers a standard $1 million insurance policy against identity theft damages, this is an overgeneralized amount with significant loopholes. In most cases, these policies will cover the cost of repairing a victim’s credit history, but they won’t cover monetary assets lost to identity theft. Thus, such identity theft policies are more like “expensive reimbursement programs” than traditional insurance, notes Michael Barnett, Executive Director of the Identity Theft Protection Association. What’s more, they won’t pay if your loss is covered by homeowners or renters insurance. (If your policy doesn’t include this coverage, it can be added for about $25 to $50 a year.)
Rather than spending money on insurance most customers don’t need, look for a fraud protection service that provides a full suite of products designed to give your customers immediate assistance in a time of crisis. Choose a provider with live resolution specialists that your customers can call for help as soon as their wallet’s been stolen or unauthorized charges have shown up on their checking account.
Tip 2: Cut through the hype around credit score tracking
Some fraud protection services tack on extra fees with promises to continuously “track” your customers’ credit scores. While it’s helpful to monitor credit reports (to find out if a thief has illegally opened a new account), there’s nothing gained from continuously tracking credit scores, which are just a reflection of what’s in the report. Why pay for something you don’t need? Moreover, savvy customers know they can annually monitor their own credit reports for free—staggering their requests every four months to each of the three major credit bureaus (Equifax, Experian, and TransUnion).
Tip 3: Transparency is key
Fraud protection services can promise all kinds of bells and whistles—but will your customers actually use them? Reputable firms will offer you regular reports on customer engagement. How many customers are going online and interacting with services provided? How many are opening emails that offer education and fraud prevention tips? If a fraud protection company can’t provide you with hard data on customer engagement, then you’ll have no idea whether you’re getting a return on your investment.
Tip 4: Look for an emphasis on education
A fraud protection company’s most important role is to prevent security breaches and identity theft before they happen. The most effective way to do that is to enlist the involvement of the customer. When you’re shopping for a fraud protection partner, find out what steps they take to educate customers on identity theft prevention. With this information, your customers can become their own best advocate.
Tip 5: Understand that less is more
You wouldn’t buy an expensive auto insurance policy to insure a 15-year-old clunker, or take out a pricey multimillion-dollar life insurance policy if you’re single with no heirs. But in effect, that’s what happens when customers—frightened by scare tactics used by many fraud protection marketers—buy way more protection than they reasonably need to protect their assets. Look for a fraud protection company that offers a basic low-cost monthly plan—which is all most people will need to achieve peace of mind—with opportunities for “add-ons” if individual customers want to invest more for particular services.