CreditSesame's free identity protection come-on

By Jeff BlyskalConsumer Reports, which promises free loan-shopping tools “so you can save money and live richly,” now wants you to spend a little money.

In late April, CreditSesame, which has 3.5 million members, launched free identity protection services, which it hyped to the press as “an industry first and a game changer for consumers.”

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But when it comes to protection, the freebie is extremely limited, and CreditSesame knows it. “If you want a more complete set of tools to monitor and protect your identity, check out our premium services,” CreditSesame tells consumers who want to learn about the free service. That “more complete” service will cost you $120 to $179-a-year in subscription fees.

We’ve never been a fan of identity protection services, because you can more effectively protect yourself for little or no cost. We recently took Target to task for offering  free credit monitoring after it let hackers steal payment card data and personal information of more than 70 million of its customers last year. But CreditSesame's offering is no better, and in one important respect is even worse :

  • CreditSesame’s free “identity protection” is really credit monitoring, which can only protect you from a small fraction of identity fraud—so-called "new account fraud," not the "existing account fraud" that makes up about 80 percent of so-called identity theft crime.
  • Like Target’s service, CreditSesame only monitors one credit bureau—Experian—which can leave gaps in the protection, because the three major credit bureaus, which include Equifax and TransUnion, don’t all track the same information, so fraudulent activity not reported to Experian would be missed.
  • CreditSesame’s identity restoration service is “self-service.” That means you do-it-yourself, which is less than the Target identity theft resolution support that provides guidance from a live person.

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  • You also get a free credit score from CreditSesame, the “National Equivalency Score,” which is one we’ve never heard of. Adrian Nazari, CEO of CreditSesame concedes that the NES is an educational score, which is not actually used by lenders in making credit decisions, and so could give you a false understanding of your own creditworthiness.
  • You’ll probably never get to tap much of CreditSesame's free $50,000 identity theft insurance, since most ID fraud victims don’t actually lose a dime out-of-pocket, thanks to federal consumer credit card fraud protections and card-issuer zero liability policies. 

If you want CreditSesame to provide the kind of services that ID protection companies such as LifeLock tend to offer for a fee–including black market website monitoring for your personal information, Social Security number monitoring, and lost wallet protection–you’ll similarly have to cough up some money.

“We give you a free Toyota,” Nazari said of his basic service. “If you want to drive a Mercedes, you have the option to pay for that.”

–Jeff Blyskal

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