- Discover Financial Services launched an identity theft protection service for all U.S. consumers, extending a service it already had made available to its credit card members.
- The service costs $15 per month and provides individuals with security alerts; credit and identity monitoring; and fraud resolution services.
- The service extension is part of Discover's desire for customers — and potential customers — to view the company as a full-service digital bank.
Identity theft impacts an increasing number of Americans. According to the consumer trade group AARP, there were nearly 1.4 million instances of identity theft in 2020 — double the number of instances in 2019.
The new Discover service monitors customers' personal information on parts of the internet where operators remain anonymous, referred to as "the Dark Web" and at three major U.S. credit bureaus, sending alerts to customers if suspicious activity is detected, the company said in an April 21 press release. It will help resolve problems if they arise and provide as much as $1 million in insurance to cover losses, legal expenses or lost wages related to any identity theft.
Discover aims to sell the service to a broader audience at a time when consumers have generally pulled back on credit card spending in tandem with the COVID-19 pandemic, even as they've increased online purchases. Credit card revenue is the company's mainstay business and the impact of less consumer spending showed up in lower first-quarter revenue, net of interest expense, relative to the period last year.
As digital identity theft and fraud rise, consumers may seek increased identity theft protection. Discover isn't the only company vying to meet an expected rise in demand. It faces rival services from software company NortonLifeLock, credit agency Experian, and retailer Costco (which offers its service in partnership with Experian).
Pricing varies widely. Costco's service costs $8.99 to $13.99 per month, excluding child protection, based on consumers' Costco membership level. And LifeLock's introductory offer costs $8.29 to $29.99 per month, depending on the level of protection and payment plan, according to those companies' respective web sites.
Riverwoods, Illinois-based Discover has been providing this protection to its card customers since 2002, but decided to extend the service to non-Discover consumers starting last month. With more shopping moving online due to the COVID-19 pandemic, customers' potential exposure to fraud has also increased.
Shannon Kors, Discover's vice president of marketing, said the program has evolved since its inception — moving from an online/offline hybrid to a fully online system. Moreover, when the program started, it monitored credit reports from just one credit bureau, but now it monitors reporting from all three major bureaus, including Experian, TransUnion and Equifax. Those companies monitor individual credit files for changes that could signal a problem.
One of the most recent changes the Discover program made is to expand coverage to include dependents, including young children, instead of solely covering the primary account holder.
Children have become particularly vulnerable to identity theft in recent years. Back in 2018, NBC News reported that more than a million children were victims of identity theft. Over 2/3 of those child victims were under eight years old.