Responding to consumers’ growing concerns about online fraud and identity theft, American Express Co. on April 13 unveiled a premium-level fraud-monitoring service that enables cardholders to opt in to receive beefed-up fraud protection.
For $15.99 per month, cardholders choosing to participate in AmEx’s ID Protect Premium service will receive more-elaborate monitoring of the Internet to detect unauthorized use of their personal information, such as Social Security numbers, names and addresses, and up to $1 million in insurance benefits to cover potential losses from identity theft.
By adding the service alongside its existing $9.99-a-month Single Identity fraud-protection service, which the company has renamed ID Protect, AmEx is “looking to monetize various levels of identity-theft protection as more consumers indicate they are worried about it,” Phil Blank, senior security risk and fraud analyst for Pleasanton, Calif.-based Javelin Strategy & Research, tells PaymentsSource.
AmEx already offered an “outstanding” array of instant alerts at no cost to cardholders notifying them of suspicious account activity, Blank notes. But Javelin research suggests that among the roughly one in four consumers who are willing to pay for extra identity-theft services from a credit card company or other provider, 29% subscribe to more than one service, and 8% subscribe to more than two such services, Blank says.
As a result, AmEx’s move may reap solid returns, and other credit card marketers likely will follow with their own beefed-up, higher-priced fraud-protection services.
“It appears that there is a pretty big market out there to be tapped among consumers who have higher concerns about identity theft, and they are willing to pay extra to get more layers of protection,” Blank says. “We’re going to see more of these premium-level services cropping up from credit card marketers.”
AmEx’s new premium-level service provides customers with 24-hour monitoring of black-market websites, public records and online directories to detect unauthorized use of personal data, with “prompt alerts” of such activity.
Customers also receive ongoing credit monitoring and a one-time credit report with the results from the top three credit bureaus. They also receive protection from losses in case their credit or debit cards are stolen, use of the latest version of Norton Internet Security Online software, and up to $1 million in identity-theft insurance to offset costs associated with legal expenses and reimbursement of unauthorized funds transfers not covered by their financial institution.
But savvy cardholders may not consider it a good value to pay nearly $200 a year for enhanced identity-theft protection beyond what is already available free of charge, one analyst suggests. Most credit card issuers and card networks already boast high-quality, built-in fraud-protection services (
“People have to be careful about what they’re buying,” Brian Riley, senior research director with TowerGroup, tells PaymentsSource. “Most cardholders’ liability in case of theft or loss is limited, and even if the loss is your fault your out-of-pocket obligation is usually about $50 at the most, so $1 million in coverage probably won’t be necessary in most cases.”
AmEx’s timing in launching the service is propitious, Riley notes, alluding to this month’s data breach at Epsilon, the e-mail marketing unit of Alliance Data Systems (
“(AmEx) couldn’t have picked a better time to roll out this service in the wake of a major data-breach event,” Riley says.
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