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In the midst of the busy 2013 holiday shopping season a security breach at Target led to the theft of 40 million (and counting) customers' credit and debit card information. Names, numbers, expiration dates, and security codes were all lifted and many, if not all, were sold via online black markets. So how do you protect yourself against credit-card fraud?

Many customers quickly canceled their cards. But even if Visa, MasterCard, Discover, and American Express cardholders failed to take this step, they were covered; that is, they had no liability for fraudulent activity. Moreover, credit card companies routinely monitor for fraud and freeze accounts or delay purchases in the face of suspicious activity and unverified identity. Debit card holders may not have the same protections, however, and can be liable for up to $500 in charges for failing to report a theft right away.

Things get really scary, though, when stolen credit card data is combined with previously-leaked personal information to create a more complete "profile" of someone's identity. Many consumers wait too long to take action, but signing up with an identity theft or credit monitoring service beforehand may save you time, aggravation, and money.

Paid Identity Theft Monitoring Services.

Each of the three major credit bureaus -- Experian, TransUnion, and Equifax -- offer subscriptions for credit and fraud monitoring ($14.95-$17.95/month). Subscribers can access their credit reports and scores and track any changes, and the services scan the Internet for personal information that shouldn't be there. Identity protection plans often include financial and personal assistance for victims of identity theft. Benefits aside, these services are not cheap and canceling a subscription can be a hassle.


Target has partnered with Experian to offer customers a year of free credit monitoring and identity theft insurance. Consumers who have shopped at Target's U.S. stores can register at by April 23 to get an activation code good through April 30. Target affirms that customers who sign up will not be automatically re-enrolled or charged when their one-year memberships expire.

MyFICO, the originator of the credit score, also offers monitoring services for $49.95 annually. The FICO Quarterly Monitoring product checks subscribers' TransUnion credit report and FICO score (the number that signals your creditworthiness to lenders) every three months and sends out immediate alerts related to suspicious activity tied to the subscriber's phone number, Social Security number, credit applications, and other personal identifiers. It also includes $25,000 in identity theft insurance to reimburse expenses and time invested dealing with a compromised identity.

Other companies, such as LifeLock, also monitor individuals' credit and personal information for misappropriation. Subscription fees vary and most plans include the same, or very similar, features as described above.

Free Credit Monitoring Options.

Two alternative services, Credit Karma and Credit Sesame, let users track their credit scores for free. Although neither offers a full credit report or FICO score, Credit Sesame provides the Experian credit score and Credit Karma gives users their three credit scores as provided by TransUnion (one each for overall creditworthiness and auto insurance risk, plus the VantageScore, which was formulated by the three major credit bureaus in an effort to create a more uniform credit-scoring system). These two services can be set to alert users when bills are due or if better loan rates are available.

Most importantly, they will send notifications if new lines of credit are opened in your name. An unexpected notification is a good indication of identity theft and should be taken seriously. These two sites don't offer any advice or financial safety net as do the fee-based identity-theft-prevention services. They also don't actively monitor the Internet for leaked personal information.

Getting Your Credit Report.

The Fair Credit Reporting Act entitles you to a free copy of your credit report from each of the three major agencies once every 12 months. Staggering requests means you can see a report once every four months. To request a copy call 877-322-8288 or go to (not to be confused with other websites with similar names that are free or require a small payment and then automatically add you as a paid subscriber once the initial report is sent). These free reports don't contain your FICO score but are the basis for determining your scores. Note that credit scores vary by the company that calculates them.

Check the report closely for errors. A Federal Trade Commission study released in February 2013 states that one in five people had found an error and more than 10 percent who subsequently had their reports modified experienced a change in their credit score. But getting errors fixed isn't always easy or quick, as numerous media outlets have reported. MyFICO tells consumers how to start the dispute process and offers a sample dispute letter to send to the credit agencies.

What to Do If You're at Risk.

If you believe your data has been or is at risk of being stolen, the first thing to do is set a fraud alert or freeze your credit file. You need only contact one of the three major credit agencies because they are required by law to forward the request to the other two. The initial alert will last for 90 days (it can be extended to seven years) and requires that lenders take additional steps to verify your identity before issuing new credit under your name. It also entitles you to an additional free copy of your credit report. Contact info for all three is available at Bankrate.

You should also file a police report if the potential identity theft is due to a lost or stolen wallet, and cancel all debit and credit cards. Be sure to save copies of all documents and record the times of all phone calls for your records.

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