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LifeLock CEO on the Today Show
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This morning the CEO of LifeLock, Todd Davis, was on the Today Show with Matt Lauer to defend his company’s service. He was there to answer a few pending lawsuits about how the LifeLock service doesn’t work and that its claims to protect and prevent identity theft are fraudulent claims. Lauer really hammered Davis (as hard hitting as the Today Show can possibly be) but there were some pretty interesting statistics Davis brought up:
- Only a 105 out of a million customers have been victims of identity theft.
- Todd Davis, advertising his SSN for the last two years, has had 87 attempts with only one successful hit in Texas where someone was able to get $500.
My opinion of LifeLock has always been that the $10 you pay each month is essentially insurance on your time. Becoming a victim of identity theft, even if you are diligent in every single possible way, is like winning the lottery (a small firehouse charity one).
Just to give you a basis for comparison, the Privacy Clearinghouse 2007 Identity Fraud Survey reported that there were 8.4M cases of identity fraud in 2007. If there are 304M potential targets (that’s the census estimate and it does include children and babies, but they can be victims too) and a 2.73% chance of becoming a victim. With LifeLock’s measures (many of which you can implement yourself such as opting out of junk mail and freezing your credit reports), you have a 0.01% chance of becoming a victim.
So, going back to the Privacy Clearinghouse’s data, the mean fraud amount was $5720 in 2007 and the mean resolution time was 25 hours per victim; so your $10 a month is buying you insurance against that < 2.73% chance (that’s if you did the average to protect yourself) of losing 25 hours. To calculate what that’s worth, you look at how valuable you think your time is and whether the $10 a month is worth it.
LifeLock shouldn’t be considered bullet proof protection against identity theft, it should be considered time insurance against dealing with it.
{ 4 comments, please add your thoughts now! }
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105 out of 1,000,000 is less than 1%. My question would be this: What is the ratio of identity thefts to credit card users for non-customers? Is it appreciably higher?
Hi Glenn, that’s 0.01% (a hundredth of a percent).
And I’m not exactly sure what you’re asking…
I agree Jim, I gladly pay for the service. At $9 a month, I am buying very, very cheap insurance and piece of mind.
I don’t know that the insurance is that valuable. From an article on the lawsuits: “The services don’t guard against many types of identity theft such as use of a stolen Social Security number on a job application or for medical services, or even the instance of an arrestee giving police a stolen Social Security number to shield his own identity. LifeLock is also being sued in Arizona over its $1 million service guarantee, which the plaintiffs claim is misleading because it only covers a defect in LifeLock’s service, and in California by the Experian credit bureau.”
Given that they admit that there are huge holes in the system (DMV, etc) and that most of what they do can be done for free yourself (fraud alerts on credit reports, do not call list, and opting out of pre-screened credit offers), I am not sure that LifeLock adds any real value. Paying $10 a month for things that can be easily done for free doesn’t seem like that great of a deal.