Consumer Reports: You can skip those ID theft services

If you're concerned about someone stealing your financial identity, you might be tempted to buy one of the many identity-protection services being heavily promoted. Millions of Americans have, but are they worth it? Consumer Reports analyzed that billion-dollar industry.

The companies charge $120 to $300 a year to protect your identity. The marketing can be heavy-handed, with claims such as "one of the fastest-growing crimes," "9 million Americans fall victim," and "you could already be a victim."

Consumer Reports finds that the most damaging type of ID theft is rare. Less than 1 percent of households reported someone opening unauthorized credit, stealing their tax refunds, or tapping into their medical benefits, according to the Department of Justice.

Furthermore, the main service that those companies offer is monitoring the big credit bureaus-Equifax, Experian, and Transunion-for new credit requests in your name. But you can do that yourself.

Consumer Reports recommends getting an annual credit report from each of the three reporting bureaus. It's free, and if you stagger your requests, you can get a fresh report every four months.

And if you have reason to suspect a security breach, you can place a 90-day fraud alert on your credit report that warns lenders to be more vigilant about granting credit.

Consumer Reports says with tax season in full swing, you'll be glad to know the Internal Revenue Service has announced beefed-up efforts to prevent tax refund fraud, including ID theft. The agency says it headed off $20 billion in fraudulent refunds last year.

Another added protection, placing a security freeze on your credit report. That way lenders you don't already do business with, like banks, can't access your information which makes it tougher for crooks to open accounts in your name. But be aware, if you apply for new credit, you need to temporarily lift the freeze for a small fee.