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ID protect hides your registration information which protects your identity from spammers, stalkers and fraudsters.  ID Protect also helps protect you from being solicited by those using the Whois data illegally, much like an unlisted phone number.  If you choose not to protect your domain with ID Protect, the name, address, and phone number you specified when registering your domain will be publicly available.

Please note that not every Registry will allow ID Protect on domains.  For example, .US domains are prohibited from using ID Protect.