Paid-for identity theft monitoring services are a waste of money and consumers would be better off using free services, according to a report by Privacy Rights Clearinghouse (PRC).

PRC's Straight Talk about Identity Theft guide details the various types of identity theft and related fraud that consumers are likely to encounter.

These include existing account fraud, current account fraud, National Insurance number fraud, criminal identity theft and medical identity theft.

"In our opinion, most identity theft monitoring services are unable to provide complete protection," the guide concludes.

PRC recommends using free or low-cost services, such as those offered by banks and credit card issuers, to monitor existing accounts for unusual activity.

Among other services it suggests is a security freeze registered with credit checking agencies such as Equifax. This prevents any new credit lines being approved unless the freeze is unlocked with a password.

PRC pointed out that most monitoring services can inform consumers of an identity theft only after it occurs, but a security freeze prevents new accounts from being opened.

"Monitoring services may provide a false sense of security because there may be holes in coverage," the organisation warned.