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LifeLock CEO on the Today Show

Posted By Jim On 05/23/2008 @ 7:07 am In Personal Finance | 4 Comments

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 [3] reported that there were 8.4M cases of identity fraud in 2007. If there are 304M potential targets (that’s the census estimate [4] 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.

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[3] Privacy Clearinghouse 2007 Identity Fraud Survey: http://www.privacyrights.org/ar/idtheftsurveys.htm

[4] census estimate: http://www.census.gov/main/www/popclock.html

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