Transaction Monitoring and Credit Monitoring in Light of the Target Breach


We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Friday, January 17th, 2014

Target has begun to offer security breach victims free credit monitoring for a year now that approximately 110 million Americans may have had their data compromised due to a security breach. We’ve advised consumers to conduct regular transaction monitoring to prevent fraud, and now some consumers have been asking us, “What’s the difference between transaction monitoring and credit monitoring?” Knowing the difference between the two matters because sometimes credit monitoring is “sold” as a cure-all, when in fact there are a number of steps that you can take to protect yourself, one of which is transaction monitoring.

Here’s a brief primer on the differences between the two:

Transaction monitoring is you looking at your account activity and alerting your financial institution if you see something fishy.

Simple, right? Yes, but it does takes vigilance. Transaction monitoring, to be effective, requires taking a regular, granular look at your credit, debit and prepaid accounts and spotting and reporting problems. Modern technology can make this fairly easy. In fact, you probably already read your monthly statements, or log onto your accounts, or get text or email alerts from your financial institutions. But you have to keep at it.

What we and others have recommended is regular, ongoing transaction monitoring as one way to protect yourself from fraudsters in the wake of the Target breach. If you have shopped at Target or Neiman Marcus or one of the other businesses rumored to have also suffered a security breach, you should step-up the frequency of your transaction monitoring now and in the future.

Reports indicate that stolen card information is already on the market, but that doesn’t mean a compromised card will be used fraudulently right away. Fraudsters may wait until the hoopla has died down and try to catch consumers unaware. So keep monitoring those accounts! Also, if you notice suspicious activity, report it to your financial institution right away. While consumer liability for fraud is limited by law, it can grow if you wait to report it.

Credit monitoring is an ongoing review of your credit history, often done by the credit reporting agencies that compile your credit reports.

That’s what Target is offering its guests: free credit monitoring by Experian, one of the “big three” credit reporting agencies. One of the key pieces of information that consumers get from monitoring is an alert whenever a new account is opened in their name. New account fraud, a form of identity theft, is destructive and costly, but it is actually rare, as our colleague Jeff Blyskal at Consumer Reports notes. In most cases, it takes a Social Security number to open a new consumer credit account, and as of now there is no evidence that the Target or Neiman Marcus hackers captured that information. So don’t panic. Target’s website says the company is offering free credit monitoring to provide customers peace of mind.

So just what does the product offered by Target do? Target is providing consumers Experian’s ProtectMyID credit monitoring service. According to Target’s website, customers who sign up for ProtectMyID get a free credit report (which you can also get once per year from each CRA at, alerts when there are changes to your Experian file, such as new accounts or delinquencies, and a variety of identity theft resolution services and insurance.

There is no charge to enroll in ProtectMyId through Target’s special website, but you do have to go through a two-step sign-up process and you have to do it before April 23, 2014. Some things to consider before you enroll:

  • the service is only free for a year, and while the Target website assures consumers that consumers will not be automatically re-enrolled, consumers may get sales solicitations as the free period ends;
  • some consumer advocates have pointed out that in order to sign up, you have to agree to mandatory arbitration, which means you waive your right to go to court should a dispute arise;
  • in the past we and our Consumer Reports colleagues have advised against paying for credit monitoring, since there are lots of things that you can do yourself that provide the same level of protection.

Whatever steps you decide to take – and we and or friends at Consumer Reports do advise that if you think your information has been compromised, you should take steps to protect yourself – remember: scammers are always eager to exploit consumer concerns. So watch out! If you get an email, letter, phone call or text message from someone claiming to be from Target go to Target’s corporate website first, before you do anything, to make sure that the communication is legit. All official communications from Target to consumers are posted here (look on the right hand side under the banner, “official documents & communication”). For more on how to avoid Target related scams, see this blog post.

Have you been affected by the Target breach? Tell us about it in the comments.

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