What Are Fraud Protection Services? Do You Need One?

Do You Know How To Protect Yourself From Fraud?

In late 2017, Darlene — a woman from Salt Lake City — thought she was in love. A few months later, she’d lost over $500,000 to an online fraudster [*].

Romance scams (like the one that Darlene fell victim to) are among the many ways that fraudsters try to trick you into giving up your money, savings, or access to your bank account. And according to statistics, you could be the next target.

Americans are the number one victims of fraud worldwide [*]. In 2023 alone, Americans lost over $10 billion to identity theft and fraud [*].

Fraud protection services can help keep your hard-earned money and personally identifiable information (PII) safe from fraudsters. But what are these services? And are they worth the cost?

In this guide, we’ll cover everything you need to know about fraud protection services so that you'll be able to make informed decisions about the best ways to protect yourself and your family from fraud.

What Is Fraud Protection? Who Is It For?

Fraud protection comprises services and tools that help you identify, prevent, and insure against losses from fraud.

While no service or person can offer 100% protection against fraud, these tools will actively monitor your credit report, bank accounts, Social Security number (SSN), driver’s license, and other personal information — to identify signs of fraud.

If anything suspicious is detected, you’ll get an alert in near real-time so that you can shut down the scammer and minimize the damage.

In today’s world, fraud protection services have become more important than ever — for everyone.

Here are a few reasons why Americans of all ages should consider fraud protection:

• 47% of Americans experienced financial identity theft in 2020 [*].
• Young people (20–29) are twice as likely to lose money to fraud than those aged 70+ [*].
• New bank account fraud increased by 64% in 2021 [*].
• 67% of Americans incurred debt in order to meet their financial obligations while trying to recover from fraud [*].

📚 Related: What To Do If Your Driver's License Is Stolen →

Aren’t your bank and credit cards already protected against fraud?

Yes, there are policies in place to protect your bank and credit card accounts from fraud, including:

• The Fair Credit Billing Act (FCBA). This 1974 federal law limits consumers’ liability against credit fraud to $50 in most cases, and provides special rights for fraud victims.
• Credit Card Zero Liability Protection Policies. Most credit cards have policies that protect cardholders against fraud and unauthorized charges.
• Bank Account Zero Liability Policies. Similarly, banks often protect account holders against unauthorized charges and fraud.

But, while these policies sound like they cover you against all types of fraud, there are gaps in their protection.

For example, the FCBA only protects against credit card fraud if you send a written dispute by mail (or online, if the lender allows it) within 60 days of the statement date when you first identified the fraud [*].

So, let’s say, like most people, you don’t scan your credit card statements line-by-line or examine your credit report monthly. If a scammer commits loan fraud or credit card fraud and you don’t catch it within 60 days, you could be held responsible for the amount that you were defrauded.

And that’s not all. Basic credit protection fails in several other ways, including:

• You’re only given a two-day window to report fraudulent credit card charges of less than $50 [*].
• No protection is provided against identity theft, which can make it harder to prove that your funds were stolen.
• There are no warnings regarding data breaches or whether your personal information is on the Dark Web.
• No SSN monitoring is provided.
• Bank and credit card fraud detection can miss “carding” scams.These are small payments that scammers use to validate your account information.
• No protection is provided against other forms of fraud, such as phishing, malware, or hacking.

📚 Related: Identity Guard vs. IdentityForce: 2024 Comparison & Showdown →

What Types of Fraud Do You Need Protection From?

The answer is simple — you need protection from all types of fraud.

Scammers work tirelessly to find new ways to steal your money and PII. Here are some of the most common types of fraud that fraud protection services can help defend against:

1. Credit card fraud

Credit card fraud occurs when someone uses your physical credit or debit card or card information to make unauthorized purchases or apply for new credit. Americans lost over $11 billion to credit card fraud last year — more than any country in the world [*].

2. Loan fraud

Loan fraud is a type of identity theft in which fraudsters use your PII to open loans or take out credit in your name. Many lenders require little to no identification before extending credit, making this an especially dangerous type of fraud.

For example, Max Hebert had his identity stolen, and it was used to claim a $45,000 disaster loan — while he was on deployment to Ukraine [*].

📚 Related: The 7 Best Credit Protection Services of 2024 (Why You Need One) →

3. Identity fraud (identity theft)

Identity fraud — or identity theft — occurs when criminals use your PII to commit fraud, hack into your accounts, or claim government benefits in your name. The U.S. government recorded a $900 billion loss to scammers who stole unemployment and pandemic benefits [*].

Identity thieves use numerous schemes to access your PII, but your data is likely already available to them on the Dark Web.

Data breaches have impacted companies including Facebook, T-Mobile, and Microsoft. For example, valid stolen credit card numbers with available credit of up to $5,000 can be sold for an average of just $240 on the Dark Web [*].

4. Online frauds and scams

Fraudsters target people online with phishing attacks, malware, and other cyber threats that can offer access to accounts and personal information. Some of the most common online frauds include:

• Committing financial fraud by sending phishing emails pretending to be from legitimate companies or organizations (banks, government agencies, insurance companies, etc.).
• Spoofing legitimate websites to redirect unsuspecting buyers and then steal their credit card information.
• Posing as potential romantic partners on dating sites and apps and then tricking targets into sending money.

The list is endless. As long as the fraud takes place on the internet, it is online fraud.

📚 Related: How To Tell if Someone Is Scamming You Online →

5. Investment fraud

Investment fraud — also known as securities fraud — occurs when criminals provide false information in order to get their victims to invest in worthless schemes or products.

For example, in a Ponzi scheme, money from new investors is used to “pay out” earlier investors — making it seem like a legitimate investment. Throughout 2020, the SEC uncovered new Ponzi schemes about once every eight days [*].

6. Cryptocurrency fraud

Cryptocurrency fraud takes advantage of the lax regulation and uncertainty surrounding crypto in order to defraud investors. In 2019, 9.6 million Americans owned at least one cryptocurrency. But by 2022, that number had ballooned to 33.7 million [*].

Crypto fraud includes everything from fake “exchanges” to pump-and-dump schemes and even crypto romance scams. Reported losses from cryptocurrency fraud were more than $1.6 billion in 2021 [*].

📚 Related: How To Check If Someone Opened an Account In Your Name →

11 Ways that Fraud Protection Services Keep You Safe

1. Three-bureau credit monitoring
2. Near real-time fraud detection and alerts
3. Financial transaction monitoring
4. Artificial Intelligence (AI)-powered threat detection
5. Social Security number (SSN) monitoring
6. Dark Web monitoring
7. Password and online account protection
8. Device and network security to protect against malware and hacking
9. Robocalls and spam email reduction to minimize phishing attacks
10. $1 million in identity theft insurance coverage
11. Family plans that protect your children and elderly family members
12. 24/7 U.S.-based fraud resolution specialists

Where basic fraud protection fails, fraud protection services go the extra mile.

Here’s how a dedicated fraud protection service keeps you and your finances safe:

1. Three-bureau credit monitoring

You can access a free credit report once a year from each of the major credit bureaus — Experian, Equifax, and TransUnion — on AnnualCreditReport.com. Unfortunately, fraudulent loans or credit inquiries can go unnoticed unless you’re diligent about checking your report.

Many fraud protection services automatically monitor all three credit bureaus for signs of fraud. You’ll be alerted about any new inquiries on your credit history, new lines of credit, or even a changing credit score. This way, you can stop fraudsters before they do too much damage.

📚 Related: Credit Lock vs. Credit Freeze: Which Do You Need? →

2. Near real-time fraud detection and alerts

Banks and other services will sometimes send you a fraud alert after they see suspicious activity on your account. But with fraud, every second counts.

Fraud protection services alert you in near real-time if someone is trying to open a new credit card, change your bank information, or get a loan in your name. This can often give you enough time to shut down the scammer and even prevent fraud.

Many services can also cover your most valuable assets — such as your home. With home title monitoring, you’ll receive notifications if a criminal is trying to commit deed fraud, drain the equity in your home, or even use a change-of-address scam to reroute your mail

3. Financial transaction monitoring

When you link your bank accounts to a fraud protection service, it will monitor those accounts for any suspicious transactions. You can even set a transaction limit that will trigger an alert. For example, if your limit is set to $200 and a criminal tries to withdraw a $500 cash advance, you’ll get an alert and can then call your bank to freeze the account.

4. Social Security number (SSN) monitoring

Your SSN is the key that unlocks your identity and opens you up to all types of fraud. For example, with only your SSN, criminals can check your FICO score and apply for a free credit card in your name. They can also do things like open bank accounts and collect tax refunds, benefits, insurance claims, etc.

Fraud protection services can monitor your SSN to see if it’s being used without your permission to open bank accounts.

📚 Related: How To Tell If a Check Is Fake (With Examples) →

5. Dark Web monitoring

The Dark Web includes millions of websites that aren’t accessible using modern browsers. It’s where criminals go to anonymously sell viruses and trade data that ‘s been stolen during breaches.

In 2021, there were 68% more data breaches compared to the previous year [*]. If your information is available on the Dark Web, you’re at high risk of becoming a victim of fraud and identity theft.

While you can use a free Dark Web scanner to check what information of yours is currently available, fraud monitoring services constantly monitor new Dark Web sites to search for your PII.

6. Password and online account protection

You do more than ever online, which is why fraudsters target your online accounts. With just your hacked email account, scammers can request a new password to your bank account — or trick your friends and family into sending them money.

The bottom line: If your password is weak, reused, or exposed in a breach, you’re at risk.

Fraud protection services offer multiple tools for securing your online identity, including:

• Compromised account warnings: You’ll be notified if your passwords or account credentials are weak or were leaked in a data breach.
• Secure password auto-generator: With one click, you’ll be able to create and save complex passwords for your accounts that hackers won’t be able to guess.
• Password manager: A secure password manager stores all your passwords in one place for easy access when you need them.

📚 Related: The 10 Best Identity Theft Protection Providers of 2024 →

7. Device and network security to protect against malware and hacking

Fraudsters have sophisticated ways of gaining access to your bank accounts, credit cards, and personal information. Malware and Wi-Fi hacking are just two of the many threats from which you need protection.

Many modern fraud protection services such as Aura or Norton360 include all-in-one digital security tools that keep your devices and networks safe, including:

• Antivirus software that stops hackers from infecting your phone and computer with malware.
• A Virtual Private Network (VPN) that encrypts your network so that hackers can’t spy on you or intercept your data online.

8. Robocalls and spam email reduction to minimize phishing attacks

Fraud protection services can automatically remove your information from data broker lists, which will reduce the amount of spam emails and calls you receive. This not only spares you from annoying spam calls, but can also minimize the number of phishing emails and calls that you receive.

📚 Related: What Happens If You Answer a Spam Call →

9. $1 million in identity theft insurance coverage

If the worst should happen, you want to know that you’re covered. Fraud protection services offer varying levels of insurance coverage against eligible losses and costs associated with recovering from fraud.

While the industry standard for ID theft insurance is $1 million, you should always read the fine print to see what is actually covered. For example, LifeLock only offers $1 million in stolen funds reimbursement on their Ultimate Plus plan.

10. Family plans that protect your children and elderly family members

You’re not the only one in your family who needs ID theft protection. In 2021 alone, more than 1.25 million children were the victims of child identity theft, while American seniors lost $1.7 billion to fraudsters.

Fraud protection services can extend protection to the more vulnerable people in your household.

11. 24/7 U.S.-based fraud resolution specialists

It’s a fact: Americans spend more time than anyone else in the world recovering from the aftermath of fraud [*].

Even worse, the majority of identity theft victims are dissatisfied with the way that financial institutions help them deal with fraud [*].

One key benefit of a fraud protection service is access to a dedicated team of fraud resolution specialists. These recovery experts will help you confront the nightmare of being victimized by fraud and even facilitate three-way calls between you, a specialist, and your bank (or any other impacted companies).

📚 Related: How To Know If Someone Is Using Your SSN → 

The 5 Best Fraud Protection Services of 2024

Fraud protection services cover you against everything from identity theft to credit card fraud. But with all the options available, which one offers the best protection without breaking the bank?

To help you decide, we reviewed recommendations by sites including U.S. News and World Report, Security.org, and others to find the best identity theft protection services that cover you against fraud.

1. Aura

Aura is more than just a fraud protection service — it’s an all-in-one solution that protects your identity, finances, devices, and online accounts from scammers. Even better, both Security.org and IdentityProtectionReview.com rate Aura as #1 when it comes to fraud and identity theft protection.  

Here’s what Security.org says about Aura in their in-depth product review:

“Aura is constantly checking Dark Web sites, data broker lists, public records, and new account records, looking for your name, Social Security number, address, and other identifying information. You can be certain that if someone has hijacked your identity, Aura will catch them.”

Aura’s best fraud protection features:

• Three-bureau credit monitoring (Experian, Equifax, and TransUnion) included in all plans, with the industry’s fastest fraud alerts (up to 4x faster than the competition).
• One-click credit lock on your Experian credit file to keep you safe from fraudsters.
• All-in-one identity theft monitoring and digital security solution — including identity, SSN, and home title monitoring, advanced antivirus software, and a military-grade VPN.
• Family plan covers up to five family members including children and adults. All adult members are covered by a $1 million insurance policy for eligible losses due to identity theft.
• Proactive identity theft protection features — including a password manager and auto-update on some compromised passwords.
• Free 14-day trial, and a 60-day money-back guarantee on all annual plans.
• Affordable pricing plans starting at $12/month.
• Unlike competitors, all Aura plans come with the same high-tier level of features.

Aura cons

• Some features aren’t yet readily available for Mac desktops or Chrome users.
• Only monthly credit scores are available (VantageScore).

2. Identity Guard

While Aura offers an all-in-one digital security solution, Identity Guard focuses solely on providing the best possible identity theft protection. (Note: Identity Guard and Aura are now owned by the same company.)

Identity Guard’s best fraud protection features:

• AI-powered threat protection constantly searches for new vulnerabilities that fraudsters can exploit.
• Comprehensive protection of your SSN, credit card, bank, and investment accounts, as well as Dark Web and social media account monitoring.
• Predictive risk Management Score based on your financial situation, online activities, and chosen security methods. Identity Guard monitors your risk assessment score for you and provides updates that can help you reduce any areas of undue risk.
• “A+” rating from the Better Business Bureau (BBB) and a 4.5 rating from Trustpilot.
• Premium customer service with dedicated fraud resolution specialists.

Identity Guard cons:

• Only customers on the high-tiered plans get access to credit monitoring reports.
• No free trial.

3. IdentityForce

IdentityForce has been fighting identity theft and fraud for over 40 years. Now owned by TransUnion — one of the main credit reporting bureaus — IdentityForce includes many fraud-focused features.

Unfortunately, however, credit monitoring, reports, and scores are only available on IdentityForce’s expensive UltraSecure+Credit plan.

IdentityForce’s best fraud protection features:

• Fraud monitoring that tracks new inquiries from banks, auto dealerships, mortgage lenders, and more.
• Medical fraud protection that helps you review your medical benefits statements for signs of medical identity theft.
• SSN monitoring that alerts you if there’s an unfamiliar name or address associated with your SSN.

Identity force cons:

• Expensive pricing plans compared to competitors.
• Credit monitoring services are only available on the highest-priced plan.
• Mobile app is compatible on Android, but iOS users report bugs and incompatibility issues.

4. LifeLock

LifeLock by Norton is one of the more popular fraud and identity theft protection services.

Unfortunately, LifeLock isn’t getting the best press lately because of recent scandals that include  hiding crypto mining activities in their antivirus software. At the time of this writing, LifeLock has a 1.4 star rating on Trustpilot [*].

LifeLock’s best fraud protection features:

• All-in-one digital security due to its partnership with Norton.
• Broad identity monitoring, including sex offender registries, payday loan monitoring, and ID verification monitoring.
• USPS Address Change Verification that can protect you against change-of-address scams.
• $1 million insurance coverage (for lawyers and fraud experts only to help with your case) if you’re a victim of identity theft.

LifeLock cons:

• Lawsuit of over $100 million from the Federal Trade Commission (FTC) due to deceptive marketing and claims [*].
• Three-bureau credit monitoring is only available on the highest-priced plan.
• Sky-high renewal costs. After your first year as a LifeLock customer, the cost of the annual plan jumps anywhere from 40–70%.

📚 Related: Identity Guard vs. LifeLock 2024 Comparison →

5. ID Watchdog

Owned by Equifax, ID Watchdog boasts of monitoring “billions of data points” in search of signs of fraudulent activity. Unfortunately, the majority of ID Watchdog’s best fraud protection features are only available on its highest-priced plan.

ID Watchdog’s best fraud protection features:

• Multi-bureau credit report lock on Premium plans.
• Financial account monitoring with transaction limits.
• Easy access to dedicated fraud resolution specialists.

ID Watchdog cons:

• Limited access on the basic plan. You have to upgrade to the premium plan to access financial accounts and social media monitoring.
• No free trial.

Want Total Protection Against Fraud? Follow These 10 Tips

Fraud protection services provide a shield against scammers. But for ultimate protection, you need to combine services and policies with the latest fraud prevention best practices, such as:

1. Freeze your credit. You can freeze your credit or set up a fraud alert to prevent unwanted inquiries to your credit report.
2. Go paperless. Shred sensitive documents including all financial, medical, and other statements that contain your SSN or account numbers. Collect your mail quickly, and keep original documents in a secure location.
3. Make sure online sites are “secure.” Before using your credit card online, verify the website's security by checking for a padlock symbol near the URL.
4. Don’t reveal your SSN. Don’t automatically provide your SSN when asked on applications. In most cases, you’ll only need to provide it when starting a new job or applying for credit.
5. Use strong passwords and two-factor authentication (2FA). Don’t reuse passwords, and don’t use easily-guessed combinations of letters and numbers.
6. Avoid public or shared Wi-Fi. Hackers can easily intercept your data. Always use a VPN or mobile hotspot in public places.
7. Don’t overshare on social media. Scammers use social media to conduct schemes and collect information about you. Keep your accounts private, and don’t respond to unsolicited messages.
8. Don’t click on suspicious links. This includes links in emails, texts, and random websites. These links might contain malware that can infect your computer and steal private information.
9. Report fraud cases to the FTC. If you suspect someone is trying to defraud you, file a report with the FTC at ReportFraud.ftc.gov.
10. Ignore unsolicited calls, emails, and texts. If someone contacts you claiming to be from the IRS, FBI, or a company that you know, hang up and call or email them back directly (at an official phone number or address) to make sure it’s legitimate.

The Bottom Line: Secure Yourself Against Fraudsters

Fraud protection takes work. While laws and policies can protect you in some cases, scammers have found ways to get around them — and can ruin your life if basic safeguards slip through the cracks.

Fraud protection services offer you peace of mind from the millions of scams targeting your identity and bank accounts. With the right tools, you can shop, browse, and socialize safely without the fear of being scammed out of your hard-earned money.

Keep your finances safe from fraudsters: Save 33% on your Identity Guard membership.