An identity monitor is a service which keeps track of someone's credit file, looking for signs of abnormal activity which could indicate an identity theft in progress. These services are offered by many banks to their customers, with people paying a fee to enroll in the identity monitor service, and they are also offered by third party agencies. The cost of such services varies, and there are mixed reports from consumer advocates about whether or not contracting with an identity monitor is worth the cost.
A typical identity monitor service monitors movements on someone's credit file every day. It sends out notifications when new accounts are opened or large purchases are made, and it looks for signs of abnormal spending patterns; for example, a flag would be sent up if someone who has never spent any money on animal care suddenly starts paying large vet bills. The service also monitors the client's credit score, looking for changes in the credit score and determining why those changes have occurred.
The rapid notification allows people to quickly take action if unauthorized activity occurs in their name. The service may offer to handle reporting of unauthorized activity for its clients, or it may provide people with the information they need to contest the opening of new accounts or to block specific charges. Some services also carry umbrella insurance so that people are not held liable for charges run up in their names without authorization.
Many identity monitor services also offer consultation and assistance to people who need help filing claims or who want information about how they can better protect their identities from theft. The purpose of such services is to work 24 hours a day so that their clients do not need to; one of the recommendations from consumer advocates to protect personal identity is to monitor credit scores and activity on someone's credit file, and an identity monitor can do this automatically.
People who have been victims of identity theft tend to be more likely to sign up for identity monitor services, because they've experienced identity theft first hand and would like to avoid a recurrence. The service can also help victims of identity theft repair their credit scores quickly. People who have not experienced identity theft can benefit from such services, although it's important to pay attention to who is offering the service, how much is being charged, and what kind of services and coverage are being offered.