So yesterday I did an analysis on whether identity theft insurance was worth it  (it’s not) and my example ID theft insurance company was Lifelock, where the CEO posts his social security number directly on the website. Well, turns out that just recently someone tried to obtain a loan using his social security number and he discovered the social security number through the Lifelock website. Two things I wanted to say about that – first, the fact that he was caught is not a vote of confidence for Lifelock and second, you must be a fool to try to steal the identity of someone touting an identity theft insurance service. On the idea that it’s not a vote of confidence, the first thing the company does is request fraud alerts (here’s a do it yourself guide to do what Lifelock does  for you, except it’s almost free), which means any strange looking loan request will get reported to you. You can request these fraud alerts yourself so the fact that the victim was the LifeLock CEO doesn’t really matter.
Robert Maynard, co-founder of Lifelock, has a less than sterling personal and business history. All this can be gleaned from a very interesting Phoenix New Times article I’ve linked to below. One of the popular stories he tells is how he spent a week in jail after being picked up for failing to pay a $16,000 casino marker (loan) at the Las Vegas Mirage. He tells the story as an identity theft victim but upon investigation it was shown that the loan was actually his and the Mirage had a copy of his driver’s license, taken when he took out the loan. In fact, Maynard may have stolen his father’s identity and opened up an American Express card that he charged $154,000 on. As if all that wasn’t juicy enough, Maynard’s credit-repair company was shut down by the Feds for false advertising and deceptive practice and he’s prohibited from working in the credit-repair industry forever. If you’re thinking about Lifelock specifically, I recommend reading that article because they also mention that they’ve only paid out three claims (no mention of how many denials).
On a sidenote, one interesting fact I learned from the Phoenix article, if you put a fraud alert at one bureau, they are by law required to notify the other two. That can save you two phone calls every 90 days, which is how long the fraud alert is good for, if you decide to go the DIY route (which is what I’d do if you’re fearful).
Much thanks to Josh for the Star Telegram article  about the ID theft and much thanks to Jake for the Phoenix New Times article  about the questionable history of Robert Maynard, Lifelock co-founder.
Update: Oh, if you want to read more, Phil points out this great article on TechCrunch .