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Lesko: Is Credit Protection Worth the Risk?

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Jason: Should you pay for credit protection? greg lesko of lesko financial takes a look. Greg.

Greg: Thanks, Jason. Playing on people's fears is a good way to sell them something. Stories about credit card hackers and identity theft leave people feeling vulnerable, and companies offering protection- -for a fee--have ramped up their marketing.

But before you start paying for a service that offers to monitor or "lock" your credit, you could investigate low or no cost protections.

Jason: What protections currently exist?

Greg: You're entitled to a free credit report every year from each of the three big reporting bureaus. You could space that out over the year to keep a closer watch on your credit.

But, if someone forges your signature on a credit application or a sales slip, you are rarely on the hook for the money. The law limits liability on stolen cards to $50, and many card issuers waive even that.

Jason: What about identity theft?

Greg: Paying for protection services doesn't prevent such theft. All the companies can do is let you know about transactions after the fact. They're like an alarm that goes off after the thieves get away.

Some credit protection companies have been fined for deceptive advertising about this.

Jason: So how can you protect your credit?

Greg: Putting a fraud alert on your account is free and can be effective. If you're at risk for identity theft, you can explore a credit "freeze." Rules on this vary by state and there are usually fees associated with it.

Otherwise, protect yourself by guarding your personal information carefully and make sure to review your account statements to catch any problems as quickly as possible.