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CreditSesame's free identity protection come-on

CreditSesame.com, 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.” 

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 hackers stole the payment card data and personal information of more than 70 million of its customers last year. Target's freebie monitors only one of the three major credit bureaus and serves as a foot in the door to upsell additional protection, and CreditSesame's offering is no better: 

  • CreditSesame’s free “identity protection” is really credit monitoring, which can primarily protect you from only a small fraction of identity fraud—so-called "new account fraud," and less so from 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.
  • On the plus side, if you subsequently become a victim of ID fraud, CreditSesame's identity restoration service offers live 24/7 telephone assistance that can walk you through the fraud resolution process and answer your questions.

Before you take your next trip, protect yourself from data thieves by making sure you're not booked in a hacker-friendly hotel.

  • 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 said that the NES is an educational score that is used by some, but not most lenders in making credit decisions. We think that could give you a false understanding of your own creditworthiness when you apply for credit from most lenders who use FICO, VantageScore, and many other in-house proprietary scoring models.
  • 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

This article was corrected on May 16, 2014 to reflect the fact that CreditSesame's  free "self-service" identity restoration feature involves telephone guidance from a live specialist, similar to the free service provided by Target. We've also more precisely described credit monitoring as primarily guarding against new account fraud and providing some protection against existing account fraud, and we've noted that CreditSesame says the National Equivalency Score is used by some lenders, but most use other scores in making credit decisions. 

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