NextAdvisor.com guide to protecting your identity the LifeLock way

Posted by Joe on July 8th, 2008

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Many of LifeLock’s critics claim that the service provides little value because everything that LifeLock does for its subscribers can be done by consumers for free. So, we decided to put this common criticism to the test.

We have reviewed the major features of LifeLock’s service and compared them with the steps you could take to accomplish the same thing. We have also provided our own opinion as to which approach is more consumer friendly and effective.

Setting Fraud Alerts

Fraud alerts are annotations made on your credit file that let potential lenders know that your identity may have been compromised. When a lender sees a fraud alert on your credit file he or she must take reasonable measures to confirm your identity prior to extending you an offer of credit. This process makes it difficult for identity thieves to open new accounts with credit card companies, cell phone carriers or any other service provider that reviews your credit report. However, fraud alerts only help prevent new account identity theft. They will not prevent identity thieves from accessing existing credit card, banking or other accounts.

Fraud alerts stay active on your credit file for ninety days and must be renewed in order to be effective. You technically only need to set a fraud alert with one credit bureau every ninety days as each credit bureau is required to notify the other two when a fraud alert is set. However, it is a good practice to set fraud alerts with all three credit bureaus directly if you believe you are at risk for identity theft. This prevents any type of technical glitch or administrative error that could prevent notification of your fraud alert from being transmitted from one credit bureau to another. You can learn more about fraud alerts by visiting our Guide to Fraud Alerts and Credit Freezes.

The LifeLock Way

LifeLock sets fraud alerts on behalf of each of its subscribers when they sign up for the LifeLock identity theft protection service. Additionally, they renew those fraud alerts every ninety days on behalf of their customers to ensure that the fraud alerts do not lapse.

The Do-It-Yourself Way

Each of the three credit bureaus, Experian, Equifax and TransUnion, has a separate processes for setting fraud alerts. In order to be effective, you will need to set fraud alerts every ninety days and we recommend setting fraud alerts with each of the three credit bureaus.

Equifax: 1-877-576-5734; www.equifax.com

Experian: 1-888-397-3742; www.experian.com/fraud

TransUnion: 1-800-680-7289; www.transunion.com

NextAdvisor.com Opinion

We give the edge to LifeLock. It is true that setting up fraud alerts can be a very simple process for the do-it-yourselfer. That being said, we feel that LifeLock’s ongoing maintenance of fraud alerts ensures that subscribers never have to worry about the alerts lapsing.

Opting Out of Pre-Approved Credit Offers

One of the most common ways that identity thieves perpetuate identity theft is by stealing your mail. The mail that you receive every day is full of personal information and can easily enable an identity thief to either open new accounts in your name or to access existing accounts without you knowing. This typically happens in one of three ways.

First, identity thieves may file a change of address form with the United States Postal Service and have your mail re-routed to another address. This allows them full access to any information that you receive in the mail. The USPS has actively cracked down on this by requiring additional verification from the requester to have mail forwarded. As such, this type of mail theft is decreasing in popularity.

Second, identity thieves may go “dumpster diving”. This is the practice of literally going through your garbage to retrieve sensitive documents and mail that you have thrown away without properly destroying it.

Finally, identity thieves may simply steal your mail right from the mailbox by grabbing it before you do. There have also been reports of postal employees or their associates that have “gone bad” and lifted sensitive mail prior to it even reaching the intended recipient.

In each of these cases, some of the most potent identity theft fuel that criminals can get their hands on when stealing your mail is pre-approved offers of credit or other financial offers that are sent to you by banks, mortgage companies, insurance companies or other institutions. These pre-approved offers can be used to perpetrate new account identity theft in which the identity thief opens new financial accounts in your name and runs up charges on them that you may be liable for paying.

The financial companies that make these offers of credit to consumers determine your creditworthiness by using information on your credit report without your authorization (this is called a “soft inquiry” or “soft pull”). While such inquiries are totally legal and do not impact your credit in any way, it is possible to opt out from any future preapproved or prescreened offers of credit.

The major credit bureaus, including Equifax, Experian and TransUnion, jointly created the website OptOutPrescreen.com to enable consumers to do just that. The site allows you to opt-out from receiving prescreened offers of credit for five years or permanently. You can also opt back in if at some time in the future your situation changes and you would like to begin receiving firm offers of credit again.

The LifeLock Way

When you sign up for the LifeLock service it automatically opts you out of receiving pre-approved credit offers and will even help you reduce other marketing offers and junk mail you receive. Additionally, LifeLock will resubmit your opt-out and junk mail requests as they lapse.

LifeLock also recently released an innovative feature called TrueAddress which monitors change of address forms submitted to the United States Postal service in the name of any LifeLock customer. This helps prevent identity thieves from stealing your mail by rerouting your postal mail.

The Do-It-Yourself Way

Here is how to process a five year opt-out of receiving any preapproved or prescreened offers of credit through OptOutPrescreen.com:

1. Visit OptOutPrescreen.com

2. Select the 5 year opt-out from the list of options on the screen and click on the submit button.

3. Enter the required information on the following screen. OptOutPrescreen.com will attempt to opt you out even if you don’t provide your social security number or date of birth, however it is possible that your opt-out request could fail without this information. Since the OptOutPrescreen.com website uses significant security measures, you shouldn’t worry about submitting this information directly. Keep in mind that your social security number and date of birth are NOT REQUIRED to process an opt-out from firm offers of credit.

4. Click on the “confirm” button to submit your information to OptOutPrescreen.com and initiate your opt-out request.

Once your request is submitted your opt-out will be processed within 5 business days. You may still continue to receive prescreened offers over the next several weeks following your opt-out, but potential creditors will no longer be able to prescreen your credit for firm offers of credit.

It is also possible to process an opt-out request by calling 1-888-5-OPTOUT (1-888-567-8688).

NextAdvisor.com Opinion

OptOutPrescreen.com makes the process of opting out of prescreen offers very simple. However, the addition of TrueAddress service makes LifeLock’s protection from criminals targeting postal mail superior to anything consumers could easily do on their own.

Ordering Your Free Annual Credit Report

Under the terms of the Federal Credit Reporting Act (FCRA) every American adult is entitled to one free credit report from each of the three credit bureaus each year. These reports can be ordered all at once from each of the three credit bureaus or they can be ordered at different times. Either way, you may request one free credit report from each credit bureau every twelve months.

The LifeLock Way

LifeLock orders your free annual credit report for you each year. You never need to request your free annual credit report from any of the three credit bureaus as long as you are a LifeLock customer.

The Do-It-Yourself Way

The three credit bureaus created AnnualCreditReport.com to simplify the process of requesting the FCRA mandated credit reports to consumers. Credit reports can be requested online or by phone. If you request a credit report online you will receive it immediately, but those requested by phone will take up to 15 days to be processed. Learn more by visiting www.annualcreditreport.com.

NextAdvisor.com Opinion

It is a dead heat between LifeLock and the do-it-yourselfer when it comes to ordering annual free credit reports.

Replacing Stolen Personal Documents

If your wallet, purse, briefcase or backpack is stolen chances are the thief got away with some or all of your important documents. This may include identification such as a driver’s license or passport, credit cards, Social Security card, insurance card, checkbooks or travelers checks.

Identity thieves can use this type of information to perpetrate any number of crimes against you. For example, they may siphon money from your bank accounts, run up charges on your credit cards, gain access to your Social Security administration account or even hijack your medical benefits.

The LifeLock Way

LifeLock offers the unique WalletLock service. If your wallet, purse or any individual personal documents are lost or stolen, you simply call LifeLock and let them know. From there, a WalletLock specialist will contact all the appropriate financial, state and federal institutions to ensure that your accounts are cancelled and documents replaced.

There are a few caveats. LifeLock obviously can’t replace personal items such as pictures, and any cash that is stolen or lost will not be covered. However, this service, which is free to all LifeLock customers, will undoubtedly save you time, money and frustration if you do experience loss or theft of your personal documents.

The Do-It-Yourself Way

The process of replacing all of your personal documents will greatly vary based on the type and number of items that are stolen from you. However, it is likely that you may have to do some or all of the following:

• Credit cards will need to be cancelled and reissued. If you have multiple credit cards from multiple issuers this means a number of calls.
• Bank account numbers will need to be changed and checks will have to be cancelled and reissued.
• Driver’s license or identity card will need to be reissued by your state’s Department of Motor Vehicles.
• Social Security card will need to be reissued by your local security administration office.
• Passport will need to be cancelled and reissued at your local post office or embassy (if you are traveling abroad.
• Insurance cards will need to be reissued.

This likely means many, many phone calls and in-person errands to successfully replace all of your missing documents and to insure that the stolen items can’t be used to perpetrate any number of identity theft crimes against you.

NextAdvisor.com Opinion

There is no contest between LifeLock and the do-it-yourselfer when it comes to replacing lost or stolen personal documents. The ease of LifeLock’s WalletLock service is a huge time saver for subscribers and is far more efficient than trying to replace personal documents without LifeLock’s assistance.

Recovering From Identity Theft

At this point, every American is at legitimate risk of having their identity stolen. Hundreds of thousands of people are victimized by identity theft each year in the United States and that trend shows no signs of slowing. It is important for consumers to understand their recovery options since there is no 100% foolproof way to prevent identity theft.

The LifeLock Way

In the unfortunate case that a LifeLock subscriber is victimized by identity thieves, he or she must notify the company within 30 days of first learning of the crime. Once LifeLock has been notified, a customer support representative will be assigned to the case and will work to verify the claim.

Once a claim has been verified, LifeLock will assign a third party recovery specialist to engage with the consumer, evaluate the identity theft incident and take all the necessary steps to fix the problem. Each identity theft crime is different so the steps taken to recover the subscriber’s identity will vary from incident to incident. The recovery specialist is both an educational resource that can inform victims of their rights and the course(s) of action that may be taken to remedy the situation and a proactive advocate that will work on the victim’s behalf to obtain information, complete applicable forms and generally guide the subscriber through the recovery process.

While much of the heavy lifting can be completed by the recovery specialist, there are some key actions required by the LifeLock subscriber while the company is working to recover his or her identity. First, the subscriber must file a police report in person with his or her local authorities. This is not only required by LifeLock, but many identity theft experts, including the Federal Trade Commission (FTC), suggest that this is the first step that any identity theft victim should take.
Some examples of steps that LifeLock may take to assist a victimized subscriber may include:

• Contracting an expert to help re-establish the individual’s credit score back to where it was prior to the incident as necessary
• Canceling and replacing all identity cards, driver’s license, passport, credit cards or other important documents as necessary
• Spending up to $1 million dollars to restore the identity of the victimized subscriber (excluding restitution and lost wages)

According to LifeLock, most identity recovery cases are resolved within 30 days of notification by a victimized subscriber.

The Do-It-Yourself Way

Where do we begin? The actual steps to recover a stolen identity will vary, but it likely means hours spent on the phone with attorneys or private investigators, researching solutions and completing required forms and reports. The average identity theft victim spent $1,884 and 231 hours to recover his or her identity, according to a recent study by the Identity Theft Resource Center.

NextAdvisor.com Opinion

We believe that LifeLock’s recovery assistance and million dollar service guarantee are one of its biggest selling points. There is no question that recovery from identity theft with LifeLock is much better than the DIY option.

After reviewing LifeLock’s service features and the options available to the do-it-yourselfer, we are confident that most people are simply better off with LifeLock protecting their identities than without it. We encourage our readers to learn more about LifeLock and identity theft protection services in general by visiting our guide to identity theft protection services.

• Reader Question: Are credit bureau fraud alerts still available?
• LifeLock receives 5 star rating from NextAdvisor.com
• Reader Question: How can LifeLock help me if I have already been a victim of identity theft?
• Reader Question: How do I set a fraud alert on my credit report?
• Debunking the case against LifeLock