If you’ve listened to the Dave Ramsey Show for any amount of time, you know he is constantly recommending Identity Theft Protection from Zander Insurance. Every time the subject of identity theft comes up, he gives a little spiel about how he’s purchased it for everyone on his team. But why would he recommend this product?
Obviously, Zander Insurance is a paid advertiser of the Dave Ramsey Show. That’s clear from his website (though not always clear on the show). But Dave says he only endorses products he truly believes in, so we’ll assume that he actually feels this product is beneficial to his listeners.
Zander Insurance’s website says the company provides the following services to its Identity Theft Protection Customers:
Protection
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A personalized protection test to see how vulnerable you are to identity theft (Sample question: “Do you use a crosscut paper shredder on credit card bills/offers, bank checks/statements, and other documents with personal information (e.g., Social Security, credit card, and driver’s license numbers) before throwing them away?”)
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Monthly newsletters and scam alerts
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Links to the
Opt-Out/Pre-Screen and
Do Not Call Registries, and information about how to place a fraud alert (visit
AnnualCreditReport.com and click on “Fraud Alert”) or credit freeze (send a written request with a copy of your ID to each of the three credit reporting agencies: Equifax Security Freeze, P.O. Box 105788, Atlanta, Georgia 30348; Experian, P.O. Box 9554, Allen, Texas 75013; TransUnion, Fraud Victim Assistance Department, P.O. Box 6790 Fullerton, CA 92834)
Recovery
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If your identity is stolen, a Personal Recovery Advocate to develop a damage assessment and recovery plan, handle any creditor dispute resolutions, continue to monitor credit bureau activity, work to remove any criminal or civil judgments, and provide information to the FTC and other government agencies
Reimbursement
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Reimbursement for lost income and expenses associated with an identity theft (i.e., legal expenses, long distance fees, overnight charges, etc.), up to $20,000
Here is the statistic Dave uses to justify purchasing a policy: According to the Identity Theft Resource Center’s (ITRC) “Identity Theft: The Aftermath 2006″ study, victims spend an average of 600 hours recovering from this crime.
Wow, how horrible. But I looked up the ITRC’s study, and here’s what the press release about it says:
In The Aftermath 2006, victims spent an average of 97 hours repairing the damage done by identity theft to an existing account used or taken over by the thief.
In cases where a new account was created, respondents in the 2006 study reported an average of 231 hours to clean up the mess. In some cases, respondents used such expressions “eight years and still working on it,” “too many to count” or “endless.”
Hmm, not exactly 600 hours, is it?
Why would Dave tell people trying to get out of debt to make their own meals, fix their own roof, mow their own lawn, etc., but then turn around and tell them to pay a company $72 per year to clean up a mess that hasn’t occurred yet?
Frankly, it’s beyond me.
If you’d like more information about why buying identity theft insurance is a dumb idea, please read Single Ma’s post, Is Identity Theft Insurance Worth the Cost?, at Fabulous Financials.
Now if you’d excuse me, I’ve got to go shred some papers (don’t you just love the way it smells when you grind up eight sheets at a time?).
*I mean, “Protection”
This is not an insurance product.
This is an administrative services contract, with restoration and ancillary reimbursement benefits, issued by Identity Safeguards, Inc. and in connection with Zander Insurance Group providing enrollment and preventative database management services.
