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ProtectMyID Review

A few months ago, I wrote a LifeLock review in which I broke down their services and tried to figure out if the service was worth it. My conclusion was that the service was comprehensive but outside of the $1M guarantee, didn’t offer anything you couldn’t do yourself (do it yourself identity protection covers what you can do). With identity theft protection services, you’re really buying peace of mind and a service plan where they do the work for you. Is the time it takes to do it yourself worth more than $9 a month? If it is, then companies like LifeLock are worth it. If you prefer to do it yourself and are diligent enough to keep at it, then you certainly could do it yourself.

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 Credit 
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MyFICO ScoreWatch No-Hassle Trial Cancellation

MyFICOI can’t remember the last time a company with a trial service reminded you that your trial period was expiring, but that’s exactly what MyFICO did.

What’s even better is that you can cancel the service online just by clicking on this link: https://www.myfico.com/scorewatch/cancelsw.aspx. You might be prompted to login but you can cancel the service entirely online. Once you click the cancel button on that page, your trial is canceled. You don’t have to talk to a customer service representative, you don’t have to wait on hold, you don’t have to deal with any shenanigans. They try to sell you their other products and they will do their best to try to change your mind, but you’re one click away from ending the trial.

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 Credit 
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Synthetic Identity Theft

Shredded DocumentsA few years ago, I discovered an error on my credit report where an extra social security number (off by one digit), a new home address, and a phone bill had been added to my report. I was able to get the information removed after jumping on a few hoops but it really opened my eyes about the weaknesses in the credit reporting system. To use a bit of database-speak, I always figured social security number was the primary key for each report – meaning it was unique to each report. If someone requested a report using an incorrect social security number, why would the bureau grant it? It’s because that makes the lending process easier and because the bureau doesn’t have to answer for its mistake. Enter, synthetic identity theft.

Synthetic Identity Theft

Synthetic identity theft is a special type of identity theft. There are two versions of synthetic identity theft. The first is where the thief rebuilds your identity using bits of information from different sources. They rummage through your trash and find a canceled check, they call your place of work and find out your telephone number, they snatch your mail and grab a 1099-INT the bank mailed you. They don’t get everything all at once, but piece by piece they put it all together. This type of piece-meal ID theft, while scary, isn’t as scary as the second type.

The second type of synthetic identity theft is where the thief steals only part of your identity and merges it with other information for use in places where the checks aren’t as stringent. They may use a name that’s similar to yours in connection with part of a social security number plus your address. To be honest I’m not entirely clear how they go about doing this because I’m not a synthetic identity thief! However, the thought of someone being able to do this, even after you’ve diligently shredded up documents, is still scary.

Preventing Synthetic Identity Theft

How can you prevent this? By being smart about your identity in a way that protects you against the regular identity thieves. First, put up a solid defense by implementing my do-it-yourself identity theft protection ideas. Then, follow the tips the SEC provides to prevent identity theft and review the FTC’s site on identity theft.

Beyond that, there are a few other places you can check like your social security report. Each year, about three months before your birthday, the Social Security Administration sends you a little booklet indicating your benefits. One of the pages will list your income each year, check that the number is accurate. Extra income could be a sign that someone has stolen your identity to get a job. If you don’t correct it, you could be liable!

Lastly, fix every last mistake you see in your report, even if it improves your score! I once had a credit card that had an average revolving balance of $5,000, way more than I typically spend in a month, and had it removed. You want your credit report to accurately reflect you as a borrower. Even the smallest errors, like an incorrect address, should be addressed because it could explode into something much bigger.

I wouldn’t go as far as signing up for an identity theft program, unless you want to use their services, because they don’t necessarily add anything you can’t do yourself. I reviewed Lifelock and found the service to be good, if you didn’t want to do things yourself. Remember, those packages are service packages and insurance packages, they don’t offer anything you can’t do yourself (ahh, the classic trade of time vs. money).

(Photo: nnova)


 Credit 
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LifeLock Review

Identity Theft On The RiseLifeLock is the company that has a picture of their CEO, Todd Davis, telling you his social security number is 457-55-5462 as a testament to the power of LifeLock’s services. It’s a marketing gimmick, no doubt, but it’s a pretty clever one, you have to admit.

However, the bottom line identity theft services like LifeLock is that you’re buying piece of mind and a maintenance service. You can do a majority of the services they provide, I outline them in Do-It-Yourself Identity Theft Protection, and they even freely admit this. With the exception of a $1 million service guarantee, everything else is free to the public.

You May Not Need It

If you are diligent, keep good records, and remember to do everything, I think you should do it yourself and not buy a service like LifeLock. If you aren’t and if you think you might be at risk for identity theft, it might be better to pay the $9 a month just so they do everything on-time and without lapses. They will remember to put fraud alerts on your credit history at the three bureaus every 90 days, they will remember to periodically refresh your data on OptOutPrescreen.com so you stop getting junk mail, and they will request your credit history every 12 months from the three bureaus. It’s not a lot of work, but if you’re prone to lapses and forgetting to do things, $9 may be a fair amount to pay for someone to look over your shoulder. That’s why I think it’s more like a service contract (like when the heating company sends a technician out to check your HVAC every six months).

Since launching they’ve added several additional services including WalletLock (explained below), scanning black market forums for the sale of your identity, and other identity theft related activity.

Is Your Data Safe with LifeLock?

The first thing you have to consider is whether the company itself is safe, which is not an unreasonable reaction because of some of the negative stories out there about former founders and such. Here’s what they say: “LifeLock is ISO 27001 certified for data and operational security and follows industry best practices to secure and protect personal information. We conduct background checks on all of our employees, including regular random drug testing. All of our facilities are built with the latest biometric security access as well as state-of-the-art surveillance and alarm systems. No data is stored onsite. No computers anywhere outside of secure data centers have our member’s critical information on them.”

About The One Million Dollar Service Guarantee

One million dollars sounds like a lot but the figure is really just to put your mind at ease. The guarantee is that if your identity is stolen while you are a customer, Lifelock will pay for people to recover it, restore your losses, and recover any expenses. This is the insurance part of the Lifelock deal, it’s really piece of mind against the threat of identity theft. Is it worth it? It’s for you to decide how much you think the service of protecting you is worth and how much the insurance is worth, then work from there. Here is a link directly explaining their one million dollar service guarantee.

WalletLock

WalletLock is a service offered by LifeLock, included in the standard service package, that lets you call an 800-number if you ever find your wallet missing or stolen. LifeLock will then work with you to cancel credit cards, report stolen drivers’ licenses and social security cards, replace passports, visas, immigration documents, checkbooks, insurance cards, etc (you’ll have to identify them all via a form beforehand). The way to do this yourself is to photocopy all your credit cards, front and back, as well as all your other important documents so you have a copy if you lose the original. It also makes sense to indicate on your photocopies the cards you have in your purse and wallet so you know which ones to cancel. You could do this all yourself, or you could have it done for you included in the price.

American Express offers a similar service called the Credit Card Registry for $29/year. “American Express Credit Card Registry ensures a Cardmember’s cards will be protected. The service will cancel and request replacements of any lost or stolen cards (including ATM cards) – all with a single call. It also provides fraud liability coverage, passport replacement, and driver’s license replacement in several states… For more information, Cardmembers can call 1-800-227-2639.”

Bottom Line

The bottom line is that if you want identity theft protection, a service like LifeLock will give you that and more. Credit bureaus, and other companies, offer credit monitoring services that just look for abnormal activity. I think those services are a complete waste of money because they won’t protect you if something bad happens (and they often more expensive).

If you are diligent, do it yourself because you don’t need to pay someone $9 for something you’re able to stay on top of. If you aren’t diligent, these services aren’t a bad idea, just know that you’re essentially buying a service contract with someone keeping tabs on your identity and nothing something super special and fancy you wouldn’t otherwise be able to do. If you do sign up, be sure to get the 10% coupon floating around and you won’t pay full price (or click on the banner below).

I have not personally used LifeLock but they’re the company I always see in the news. Have you used them, or TrustedID or IdentityTruth, and want to share your experience; or do you see it as a waste of money?

(Photo: thetruthabout)


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Do-It-Yourself Identity Theft Protection

Identity TheftLast Friday I discussed the CEO of LifeLock’s appearance on the Today Show and how many of the services they offer are things you can do yourself. So, rather than leave it all vague, here’s what you can do for a do it yourself solution.

AnnualCreditReport.com

Through AnnualCreditReport.com, you can request a copy of your credit report from each bureau once a year. I generally like to stagger it every 4 months so you can keep up to date absolutely free. For example, get your Experian in January, then your TransUnion in May, then your Equifax in September, then Experian again the following January.

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 Personal Finance 
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LifeLock CEO on the Today Show

LifeLockThis 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.


 Credit 
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LifeLock CEO’s Identity Stolen & Co-Founder Is Suspect

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.


 Credit 
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Is Identity Theft Insurance Worth It?

With the growing number of identity thefts, given the age of computers and our comfort with electronic commerce, a lot of identity theft insurance companies have been hitting the news lately. Are they really worth it? Is identity theft so prevalent that you would actually need insurance to protect against it? I personally know at least one person who has suffered from identity theft and it cost them quite some money and a lot of their time, easily two or three months of headache and hassle, to clear everything up. Looking at the numbers, is it worth it to pay a company like Lifelock $99 a year for up to $1,000,000 in identity theft insurance? (Many companies and banks offer identity theft insurance but Lifelock appears to have the most bang for your buck from the ones I’ve seen; a bank such as Wells Fargo offers a mere $10,000 in protection for close to $160 a year)

Not entirely sure. According to the FTC, in 2006, the worst state for identity theft was Arizona with 147.8 victims out of every 100,000 persons, or 0.15% chance of being a victim of identity theft. It is also estimated that each victim spends approximately $1,500 and 175 hours to clear their good name. If you estimate that each hour costs $30 (for an annual salary of $60,000), then the total cost is approximately $6,750. Thus, the average annual expected cost of identity theft per person, as measured by probability of being a victim multiplied by cost, is $10.13. Thus, a service like Lifelock is not “worth it” in the strict financial sense.

I poked around the Lifelock website to what they actually offer and they tell you, plain and simple, what they do and the fact that you could do it for yourself for free (I add how in the parenthesis):

  1. Tell each of the credit bureaus to set fraud alerts on your accounts. (You can do this yourself by calling the bureaus and requesting it)
  2. They tell the credit bureaus again every 90 days. (Again, you can do this yourself)
  3. They request your name be removed from junk mail lists. (You can do this free yourself at OptOutPrescreen)
  4. They request free copies of your credit reports. (You can do this free yourself at AnnualCreditReport)
  5. If your identity is stolen, they will spend up to $1,000,000 to help you get it back. This is the only thing you can’t do yourself… well you can self-insure but you won’t have $1M backing you up.

The most interesting thing about the site is the fact that the CEO, Todd Davis, plasters his social security number, 457-55-5462, all over the site. Assuming that is his social security number, that’s a pretty bold thing to be doing and a strong “money where your mouth is” type of statement that I can admire. Of course, that alone isn’t a reason to try the service, doing a calculation like I did earlier, which showed this particular $99/yr service is not worth it, is how you should be making your decision. That being said, putting your social on the web like that is certainly a great marketing ploy.

(Another company that offers a very similar service is TrustedID but it’s $12.95 a month, making it a less attractive offer; but I mention it in case you wanted to get a better feel for the industry. They lack the catchy marketing ploy of plastering their CEO’s social security number on their site.)

Verdict: Identity theft insurance isn’t worth it when you look at the numbers but sometimes it’s about peace of mind. As for me, I won’t be getting it anytime soon unless the probability of identity theft goes up significantly.


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