BT, is offering its broadband customers identity (ID) theft insurance.

The internet service provider (ISP) said its BT Identity Support service will give policy holders advice on how to reduce the chances of becoming a victim on or offline, recognise the warning signs of identity theft and get help and support from the BT Identity Advice Line. 

Part of this advice is aimed at helping people resolve cases and includes providing letter templates to help resolve issues with creditors. Policy holders will also get a personal caseworker, as well as passport and driving license replacement cover.

BT, which last week published a guide to help consumers understand and tackle ID theft, is just one of a number of companies and banks that have latched on to growing consumer concerns about ID theft and which now offer this form of cover.

However, consumer association Which? said ID fraud insurance is inspired marketing which cashes in on public concern and these products are "almost worthless".

It said the insurance won't cover what the fraudsters have got away with as banks are liable for the financial loses because consumers are covered by the Banking Code and the Consumer Credit Act.

In a report last July it criticised banks and companies for a number of unnecessary, expensive financial products and gave high street bank Halifax its 'Useless financial product of the year' award for its identity theft insurance which costs £84 a year.

"The only things it would cover are expenses and advice. Unless you were the victim of horrendous ID theft, your expenses won't be that much and you have to do the legwork anyway to put things right," said a Which? representative.

In fact BT's website lists typical expenses as legal fees, lost wages, costs for rejected loan fees, postage and telephone calls according to BT's website.
Which? went on to say that paying for advice was pointless as it is available free from many organisations including the police,

It said prevention was better than cure and advised people to beef up their online and offline security procedures and not give away personal information.

"And buy a shredder," said Which?

However Gavin Patterson, Group Managing Director Consumer, BT, said: " Identity theft has become a very real threat to all internet users.

"One in four people in the UK has been a victim of it or knows someone who has, and our research shows it’s currently costing the UK £1.7 billion each year."

Customers taking out BT's policy will pay £44.99 for up to £50,000 to cover the cost of restoring their identity for the first year. The price rises to £59.99 after the first 12 months. The service also provides credit monitoring so BT can let customers know if it believes someone is trying to steal their identity.

BT is also offering a data backup data storage service. Its 'Digital Vault' provides backup and storage of 300MB of data for £2.99 per month, 600MB for £4.99 per month or 1GB for £6 per month.

If a PC hard disk crashes, or if a computer is stolen, Digital Vault ensures that important personal content is not lost.