Lost laptop computers may cost you more than you realize

Posted by Caitlin on July 2nd, 2008

Thanks for visiting the NextAdvisor Daily blog. You may want to subscribe to our RSS feed.

The recent Ponemon Institute survey, commissioned by Dell, sheds light on just how many laptops are lost or stolen at U.S. airports. At 36 major airports, lost laptops total more than 10,000 a week. When smaller airports are taken into account as well, the total number of lost laptops rises to 637,000 a year. Laptops are most frequently lost at security checkpoints. Less than 35% of those lost laptops are ever recovered.

Unfortunately, despite the fact that 53% of travelers surveyed said that their laptops contained confidential company information, 65% make no attempt to protect that information. 77% said they would have no hope of recovering a laptop lost at the airport, and 16% wouldn’t even try.

The U.S. Federal Trade Commission recommends using tracking devices like Absolute Software’s LoJack, which can help track down the location of a stolen laptop.

There are many services that can help ease the inconvenience and potential risk that occur when a laptop is lost. An online backup service will ensure that you still have copies of your important files. If you have sensitive personal and financial information stored on your laptop, an identity theft protection service will help prevent and detect identity theft. And if your identity is stolen, a credit monitoring service will alert you regarding any changes to your credit report. When laptop theft and loss is so common, why not take steps ahead of time to prevent some of the worst possible consequences?

• Data Breach Alert: Stolen laptop impacts Virginia school employees
• Is online data storage the secret to eliminating many data breaches?
• WalletLock takes the worry out of losing your wallet
• Data Breach Alert: Nevada government agency loses personal data of job seekers
• Data Breach Alert: Over 200 child identities exposed in UK

Reader Question: How do I set a fraud alert on my credit report?

Posted by Joe on June 29th, 2008

Q: I recently lost my wallet which contained my driver’s license, Social Security card and credit cards. How do I go about putting a fraud alert on my credit report?

A: A fraud alert is an annotation on your credit report which lets potential lenders know that you have been, or believe you may have been, victimized by identity theft. They can be an effective tool in preventing identity thieves from opening new financial accounts using your personal information. You can learn more about fraud alerts, their purpose and how to set them by reading our Fraud Alert and Credit Freeze Guide.

Losing a wallet or purse doesn’t just represent and identity theft risk. It also means the hassle of replacing all of the contents such as your driver’s license, Social Security card and credit cards. One of the reasons we recommend LifeLock’s identity theft protection service is because they offer a unique feature called WalletLock. Subscribers that lose their wallet or purse simply have to contact LifeLock and a recovery specialist will work on their behalf to replace all the important documents that were lost or stolen. Just about the only things that WalletLock can’t replace are cash and personal effects, such as family photos.

To learn more bout LifeLock or other identity theft protection service visit our guide to identity theft protection services.

• WalletLock takes the worry out of losing your wallet
• LifeLock receives 5 star rating from NextAdvisor.com
• Reader Question: Are credit bureau fraud alerts still available?
• TJ Maxx to send follow up fraud alert letters to victims
• Debunking the case against LifeLock

Reader Question: Does signing up for LifeLock cover my spouse?

Posted by Joe on June 29th, 2008

Q: Does signing up for LifeLock cover my spouse? If not, does LifeLock offer a special discount for married couples?

A: Each LifeLock membership only covers the named subscriber, so your spouse would not be covered by LifeLock’s identity theft protection service unless you both subscriber. There are no special discounts offered to married couples, but NextAdvisor.com has negotiated a special discount and free trial exclusively for our readers.

If you and your spouse sign up for LifeLock through this link you will receive a special 11% discount and a free 30 day trial of the service. LifeLock makes it easy for couples and families to sign up together. You can sign up your significant other and even children for the LifeLock service on one single application form on their website.

To sign up for LifeLock, simply click here or visit our review of LifeLock to learn more about the identity theft protection service.

• Reader Question: Will my LifeLock or Equifax account also cover my spouse?
• LifeLock… Now with frequent flier protection!
• Reader Question: How can LifeLock help me if I have already been a victim of identity theft?
• Reader Question: Which identity theft protection service is best if I’ve already been victimized?
• Get 10% off a year of Mozy online backup service with special discount codes

LifeLock CEO addresses lawsuits and critics head on

Posted by Joe on June 20th, 2008

LifeLock CEO Todd Davis addressed rumors and criticisms of his service in a virtual town hall meeting held this morning. The hour long question and answer session was moderated by veteran news man Kevin McCabe and included over 500 hundred registered participants from across the country.

Dozens of questions covering a wide range of topics, including the status of the pending lawsuits against LifeLock and Davis’ own brush with identity theft, were asked by the participants and answered in a frank and transparent manner by Davis. Below is a recap of the major topics discussed throughout the town hall meeting.

The LifeLock Service

Davis began the meeting with a recap of the services that LifeLock provides to its subscribers in response to a participant question. According the Davis, LifeLock will:

- Set fraud alerts for each subscriber with each of the three major credit bureaus, including Experian, Equifax and TransUnion. LifeLock will also renew these fraud alerts every ninety days as they expire.

- Scrub subscriber names from the Direct Marketing Association (DMA) mailing lists (what Davis called the “junk mail list”) and stop them from receiving most pre-approved offers of credit excluding those sent from financial institutions that the individual already has a relationship with. Davis pointed out that while some people see these mailings as an annoyance, LifeLock see them as “points of vulnerability” for identity thieves looking for potential victims.

- Monitor thousands of “black market sites” on the Internet where criminals buy and sell stolen personal information such as social security numbers, credit card information and other sensitive data with their eRecon service.

- Authenticate any change of address requests made with the United States Postal Service (USPS) using LifeLock’s TrueAddress feature.

- Replace any stolen identification, credit cards, insurance cards, social security cards or other similar documents if a subscribers wallet or purse as a part of their WalletLock program.

Davis also discussed their services for children which differ slightly than those for adults. LifeLock’s child benefits include monitoring the three credit bureaus and Social Security Administration files to ensure that there are no fraudulent records created using there personal information. Since most children should not have a credit file or work history, any positive hits are likely signs of potential identity theft.

Davis was extremely upfront with the fact that LifeLock is not a silver bullet to prevent all forms of identity theft, but rather a step that consumers can take to greatly reduce the risks of being victimized. “We can’t stop all identity theft, but we can put up a great first line of defense”, said Davis.

Davis also pointed out that of the over one million active LifeLock subscribers, only 127, or about 0.01%, have been victimized by identity thieves versus the approximately 2.6% of all Americans are victimized by the crime each year according to the FTC. “I guess I can let that stand on its own merits,” he said.

The LifeLock Million Dollar Total Service Guarantee

The LifeLock million dollar service guarantee, and more specifically what it would and would not cover, was the topic of many participant questions that followed. In the unfortunately case that a subscriber is victimized by identity theft LifeLock “will do everything the law will allow us to do to make your life better,” said Davis.

When asked about whether LifeLock’s guarantee covered things such as medical or insurance related fraud, Davis echoed his previous statement that the service can’t prevent all forms of identity theft. “But, we will be there to help clean it up,” he said.

For more information on the specifics of the LifeLock million dollar total service guarantee please read our previous coverage and analysis.

Todd Davis’ Run-in with Identity Theft

Davis was very candid with the details of his own brush with identity theft almost two years ago. A criminal identified only as Daniel from Fort Worth, TX used Davis’ social security number, which is prominently displayed in LifeLock’s advertising campaigns, to fraudulently secure a $500 pay day loan.

Davis explained that since the payday loan service did not pull a credit report that the fraudulent activity was not caught by fraud alerts placed by LifeLock. However, Davis said that “the service worked exactly as it should”. As soon as Davis realized he had been victimized he contacted LifeLock’s recovery specialists who successfully recovered his identity. The perpetrator was ultimately caught and charged with the crime by local authorities.

Regarding the rumor of other identity theft crimes perpetrated against him, Davis was very clear that the Fort Worth incident is the only one that he was aware of. He specifically addressed the rumor that dozens of drivers licenses have been issued in his name. “I have seen no evidence of drivers licenses in my name being issued in other states,” he said.

Addressing the Lawsuits Against LifeLock

When presented with several questions related to the series of lawsuits pending against the company, Davis encouraged the audience to form their own opinions rather than simply believing the headlines in news reports or press releases. Davis went on to share the fact that there are currently class action lawsuits pending in seven states which only included about nine people. All of the participants in these class action lawsuits against LifeLock are still active members of the service and none of them have claimed to be identity theft victims, according to Davis.

“Look at the facts”, he said. “Dig in and look at the details”.

The LifeLock CEO also discussed the status of the lawsuit filed by Experian against the company. One of the key claims of that lawsuit is that LifeLock is illegally setting fraud alerts on behalf of consumers with the three credit bureaus, including Experian. Davis commented that LifeLock is comfortable with their legal position and is working within the spirit of the laws that allow for consumers to set fraud alerts. Davis conceded that, “guys like Experian don’t like what we do”, but also made it clear that he welcomed the opportunity to work with Experian to fight identity theft together and work in the best interest of consumers.

Other Topics

- Davis commented that LifeLock’s subscriber base of well over one million continues to grow at a rate of thousands of new subscribers per week. “We set new records for subscribers nearly every day,” said davis.

- Davis is very happy with their current association with NASCAR and expects to have an ongoing presence in motor sports. He mentioned that LifeLock was recently the named sponsor of the Michigan 400 and will be sponsoring the LifeLock.com 400 in July.

- When asked about whether or not he would continue to be the face of LifeLock’s advertising campaign, Davis eluded to the fact that the company will continue to evolve the campaigns while building on their current success. For example, he pointed out that he probably had “the most famous social security number in the world,” so that would probably continue to be a part of their marketing efforts. he did admit that the company’s widespread advertising even got to him sometimes. “I listen to satellite radio and even I get sick of hearing me,” he said.

We applaud Todd davis and LifeLock for having the courage to address his critics and concerned consumers in such a transparent forum. Davis said he will likely schedule more town hall meetings in the future to keep an open line of communication with consumers. “We want to get the facts out there about LifeLock,” he said.

• LifeLock CEO to answer questions and address criticisms in town hall meeting this Friday
• Debunking the case against LifeLock
• LifeLock… Now with frequent flier protection!
• LifeLock launches grassroots campaign to increase consumer awareness of identity theft
• Reader Question: How can LifeLock help me if I have already been a victim of identity theft?

Shredding sensitive documents - another precaution to avoid identity theft

Posted by Caitlin on June 19th, 2008

If you are concerned about the risk of identity theft, hopefully you have already invested in an identity theft protection service such as LifeLock or Identity Guard. But if you are really serious about protecting yourself from identity theft, there are more steps you can take. As we reminded you yesterday, you should avoid revealing personal information about yourself on MySpace, Facebook, or other social networking sites. (Or anywhere else on the Internet, for that matter.)

Another important precaution you should take is to shred a any sensitive documents before discarding them. This article at IdentityTheftFixes.com advises readers about how to select the right shredder for your needs. Main considerations in selecting a shredder should be:

• Safety: Some shredders have safety sensors, and some do not. If you and your family enjoy having fingers, buy one that does.
• Confetti cut: Shredders that cross cut or confetti cut are more expensive, but they are much more effective at preventing identity theft than cheaper shredders that cut paper into strips which could easily be taped back together.
• Ability to cut through plastic: Many shredders can now shred CDs and credit cards, which is very useful, since CDs can also contain sensitive information, and unwanted or expired credit cards should always be thoroughly destroyed they are thrown away.
• Price: Shredders can range from $20 to over $1000. IdentityTheftFixes.com recommends that you plan to spend at least $50, since anything cheaper is probably not going to have the quality or longevity that you need.

Once you have a shredder, it will be faster and easier to shred credit card offers and other junk mail. You should also be sure to shred any CDs or DVDs that may contain sensitive or personal information, expired forms of identification such as old drivers licenses or passports, any document with a social security number, credit card number, or other identifying information, old medical records and even documents that may contain sensitive personal information about your children. (It is easy to forget that children can also have their identities stolen - see our Child Identity Theft Protection Guide for more information.)

To learn more about identity theft protection services, visit our identity theft protection service guide.

• How to steal Colin Powell’s identity
• Facebook moves to protect users in partnership with 49 states
• WalletLock takes the worry out of losing your wallet
• How to report a fake profile page on Facebook
• Your new Facebook friend just stole your identity

LifeLock CEO to answer questions and address criticisms in town hall meeting this Friday

Posted by Joe on June 18th, 2008

LifeLock CEO Todd Davis will host an online town hall meeting scheduled for Friday June 20 at 10:00 am PST. The meeting will be held in a question and answer format and all attendees will have the opportunity to submit questions in order to receive answers directly from Davis. Anyone may take part in the meeting by registering ahead of time at LifeLockAsks.com.

The town hall meeting appears to be part of a larger strategy by LifeLock to dispel rumors about the company with open, honest dialogue. It has been less than a month since Davis appeared on The Today Show where he addressed criticisms of his company head on during an interview with Matt Lauer, anchor of the popular NBC morning show.

“LifeLock has always been transparent when answering questions,” Davis said. “Now it is time for consumers to get the answers they need and hear the truth.”

While the topics covered in the town hall meeting will largely depend on the questions that come from attendees, we expect that recent lawsuits filed against LifeLock, the effectiveness of the service and Todd Davis’ own experience with identity theft will all be covered. You can read our recent analysis of many of the common criticisms of the LifeLock service and their $1 million service guarantee to learn more.

We continue to stand firmly behind our five star rating and editor’s choice designation of LifeLock’s identity theft protection service as we feel it is one of the best overall values in identity theft protection.

Those interested in taking part in the conference call must register for the event by visiting LifeLockAsks.com. Additional instructions, including the phone number to dial in order to take part in the call and how to submit questions for the event, will be provided by email to all registrants.

We strongly encourage any of our reader’s with questions about LifeLock to attend Davis’ town hall meeting. We will be covering the event and will post a full recap immediately following the conference call.

• LifeLock CEO addresses lawsuits and critics head on
• LifeLock… Now with frequent flier protection!
• Debunking the case against LifeLock
• Reader Question: How can LifeLock help me if I have already been a victim of identity theft?
• Reader Question: Are credit bureau fraud alerts still available?

MySpace Identity Theft Protection Guide

Posted by Caitlin on June 18th, 2008

Our Facebook Identity Theft Protection Guide provides six tips to prevent Facebook users from being victimized by identity theft. These six tips concentrate on two areas in which users can be proactive in protecting their identity and personal information: limiting the amount of personal information available and restricting your Facebook profile to people you know and trust. Many of these tips are also applicable when using MySpace, but there are some significant differences between various social networking sites. While Facebook is primarily geared toward one on one interaction with people you know in real life, MySpace is more frequently used to establish a larger and more public online presence and facilitate contact with large groups of people. While we still recommend that users only accept friend requests from people they know, we realize that this is not necessarily realistic. If you do choose to make your MySpace profile visible to strangers, we strongly encourage you to be extremely careful when publishing any information about yourself. Presumably, you would not walk around in public wearing a t-shirt printed with your birthday, phone number and address. So use the same discretion on MySpace.

Tip #1: Decide how public you want your MySpace profile to be, and select your privacy settings accordingly.

MySpace does offer some privacy settings, although they are not nearly as comprehensive as the privacy settings on Facebook. You can access these settings by clicking on the “My Account” link near the upper right hand corner of any page on the MySpace website. From the “My Account” page, click the “Privacy” link. This will take you to the “General Privacy” page, where there are six options for restricting your visibility.

Online Now: Whether you choose to show people when you are online is up to you, but bear in mind that the more “time and place” data that you expose, the easier it will be for people to determine what your daily routine is like. That knowledge could be used to victimize you. (See Tip #3.)

Birthday: This is an important piece of personal information that can potentially be used by identity thieves. It is safest not to make it visible, particularly if you accept friend requests from strangers.

Profile Viewable By: Who you allow to view your profile is a very important decision, as it should determine how much information you decide to publish. If you choose to make your profile visible to everyone, or everyone 18 and over, you should treat it like a personal website and keep personal information to an absolute minimum. If you choose to make your profile only viewable by your friends, and only accept friend requests from people you know, then you can basically follow the six Facebook security tips.

Photos: It is almost never a good idea to encourage the circulation of personal pictures on the Internet. We suggest that you uncheck this option.

Block Users By Age: This is at your discretion, although you should seriously consider preventing users under 18 from contacting you if you are a teacher or work in some other profession where you are a figure of authority for minors. Also, bear in mind that many users’ MySpace profiles do not reflect their actual age.

Block Users: While this may be a useful feature for you, it will not really help protect you from identity thieves, since you can’t possibly know who they are ahead of time.

Tip #2: Limit the amount of personal information available on your MySpace profile.

If you do choose to make your MySpace profile visible only to your friends, and only accept friend requests from people you know, then the six Facebook security tips apply here as well. Many MySpace users, however, either make their profile visible to everyone, or accept friend requests from strangers, or both. If your profile is visible to strangers, you should be especially careful when publishing any information about yourself.

Exposing your full name, date of birth, phone number, email address, or home address to the general public is extremely foolish. Revealing personal information about your spouse or significant other can put you both at risk of having your identities stolen.

Identity thieves can use your phone number and home address to submit a change of address form with the United States Postal Service and have your mail forwarded, allowing the thief to gain access to financial or other sensitive information that would allow them to open a credit card or other accounts in your name. They might also use contextual information in your profile to deduce what your user names and passwords could be for various accounts, and hack into these online accounts with this information.

Our recommendation is to limit the amount of information available on your MySpace profile. Specifically:

• Do not list your full date of birth, phone number, or home address on your MySpace profile.
• Limit the amount of contextual password clues on your profile pages. Identity thieves know that many people use personal information, such as birthdays, a spouse or significant other’s birthday or name, anniversary dates, mother’s maiden name or pet’s name as password on their personal account. It is also a good idea to refrain from using personal information in your online passwords, as this makes your personal accounts much more vulnerable to being hacked.

Tip #3: Limit the amount of “time and place” data that you expose through MySpace.

MySpace users often publish information about their schedule and whereabouts on their profile, or in MySpace’s forums. Information about the exact location of your home, school, or office, as well as information about your immediate or upcoming plans can help criminals victimize you in a number of ways. Personal photographs can be even more revealing, since any number of seemingly insignificant details could be used to uncover information about your whereabouts or daily routine.

By revealing when you will be away from your home, even indirectly or unintentionally, you put yourself at risk. Criminals can use this information to determine when your home may be most susceptible to a burglary, which could open you up to any number of forms of identity theft or worse.

Tip #4: Remember that even people you know can be identity thieves.

Even if you do make your MySpace profile visible to only your friends, and only accept friendship requests from people you know, you should still be very cautious when revealing personal information online. Several recent studies show that a significant number of identity theft victims know the person that victimized them.

According to Javelin Research, 17% of identity theft crimes are perpetrated by people that the victim knows, such as friends or family members. The credit bureau Experian found that 55% of identity thefts perpetrated against children were committed by someone the victim knew.

Even if you believe that all your MySpace friends are people you know and trust, we strongly recommend that you still follow all of these security tips to avoid falling victim to MySpace identity theft.

Tip #5: Read and follow the safety tips provided by MySpace.

MySpace recently added an extensive section to the website dealing with safety. You can access this section by clicking on the “Safety Tips” link at the bottom of any page on the MySpace website. These safety recommendations are mainly directed at teenagers and their parents, but there is other information that should be helpful and valuable to any user.

Tip #6: Consider an identity theft protection service.

Identity theft, whether online or in the real world, is a real and growing threat. We recommend that all consumers consider using a proactive identity theft protection service to protect their identities. Two such services that we have reviewed and recommend are Identity Guard and LifeLock.

Each identity theft protection service is different, but most will:

• Set fraud alerts with the 3 major credit bureaus so that new accounts cannot be opened in your name without your knowledge.
• Provide you with identity theft insurance that will reimburse you on costs and expenses you incur as a result of being victimized.
• Provide you with copies of your credit report.

You can learn more about the various benefits of identity theft protection services and learn more about the specific services we have reviewed by visiting our identity theft protection service guide and comparison.

While social networks like MySpace can be fun and productive services, it is important for users to be aware of the risks that they pose. We believe that taking proactive steps to protect your identity on MySpace will only improve the amount of enjoyment you can get out of the service.

• How to report a fake profile page on Facebook
• Facebook moves to protect users in partnership with 49 states
• Your new Facebook friend just stole your identity
• Facebook Identity Theft Protection Guide: 6 tips to protect your identity on Facebook
• Facebook phishing scams increase risk of identity theft on the popular social network

Identity Theft Shield from Kroll and Pre-Paid Legal Review

Posted by Joe on June 18th, 2008

We receive dozens of emails each month asking for our opinion on Identity Theft Shield, an identity theft protection service created by Kroll, Inc and distributed by thousands of independent representatives of the network marketing firm Pre-Paid Legal Services, Inc. We have reviewed Identity Theft Shield and found that it offers solid identity theft recovery support for victims but takes no steps to protect their subscribers from having their identities stolen in the first place.

Identity Theft Shield offers single bureau credit report monitoring of your Experian credit file for $9.95 per month which also includes a free Experian credit report and score at sign up. Experian is the largest of the three credit bureaus and will likely reflect most major changes to your credit report, but we believe that three bureau credit monitoring is a better option since it eliminates the risk that a potentially fraudulent account or entry may not show up on your Experian credit report but end up on one of the other two bureau files in your name. Identity Theft Shield also offers a Gold package which includes credit report monitoring of all three bureaus, including Experian, Equifax and TransUnion, for $12.95. The Gold package also includes a credit report from each of the three credit bureaus at sign up.

Credit report monitoring is a good tool to help identify inconsistencies in your credit report which could be caused by identity thieves, but it doesn’t prevent identity theft in any way. Other services we have reviewed, such as LifeLock, Identity Guard, Identity Truth and Trusted ID, take proactive measures to prevent identity theft crimes from being perpetrated against their subscribers. Identity Theft Shield, on the other hand, offers no tools that actually prevent identity theft.

Identity Theft Shield does offer extensive recovery services to their subscribers if they are the unfortunate victims of identity theft. Identity Theft Shield sets fraud alerts and sends notifications to all applicable government agencies and financial institutions on behalf of the victimized subscriber. They also monitor an extensive list of public and private databases in an effort to identify any misuse of a subscriber’s personal information. Identity Theft Shield’s recovery services also help reduce some out-of-pocket expenses and their fraud resolution specialists are able to handle much of the heavy lifting when it comes to recovering a stolen identity.

Setting fraud alerts and proactively searching national databases for suspicious activity are both great services for victims, but they are also extremely effective in preventing and identifying potential identity theft crimes. In fact, many of the other services we have reviewed offer these tools to all subscribers as preventative measures rather than after a crime has already been committed as identity Theft Shield does.

The lack of proactive identity theft prevention measures is the biggest downside to the Identity Theft Shield service. We do believe that it is a good service for victims, but many of the solutions they offer to help recover a stolen identity are used by other identity theft protection services to actually prevent identity theft in the first place.

We would suggest LifeLock or Identity Guard over Identity Theft Shield for most consumers. Both services received five stars on our comparison of identity theft protection services and, in our opinion, both deliver more extensive levels of service than Identity Theft Shield.

LifeLock offers proactive identity theft protection by setting fraud alerts on your credit file, monitoring the Internet for unauthorized use of your personal information and alerting you if anyone attempts to reroute your postal mail in an attempt to gain access to sensitive correspondence such as financial records. They also provide a fairly extensive service guarantee which will cover most costs and all the heavy lifting related to recovering your identity if it is stolen while you are a LifeLock member. This guarantee does have its limitations, which we have previously analyzed, but overall we feel that LifeLock is a more complete identity theft protection solution than Identity Theft Shield.

Identity Guard is another option, particularly if credit report monitoring is important to you. They provide 24/7 credit report monitoring of all three credit bureaus and quarterly access to your credit report from Experian, Equifax and TransUnion. Identity Guard also offers a series of advanced tools which help prevent and/or identify any unauthorized uses of your personal information. Plus, Identity Guard offers a $20,000 insurance policy which covers many costs in the case you that a subscriber fails victim to identity theft.

You can sign up for LifeLock and Identity Guard online or over the phone and both services offer a 30 day free trial of their product. Identity Theft Shield does not offer a free trial and can only be purchased by contacting a Pre-Paid Legal independent sales representative.

Please visit our identity theft protection service comparison to learn more about these identity theft protection services.

• Kroll Identity Theft Shield identity theft protection service review
• Data Breach Alert: Blue-Cross notifies thousands of of identity theft concerns
• Identity Guard provides extensive identity theft protection and detection
• NextAdvisor reviews Identity Truth
• Reader Question: Are credit bureau fraud alerts still available?

LifeLock’s $1 Million Guarantee - Separating Fact From Fiction

Posted by Joe on June 16th, 2008

Recent reports of a two year old incident involving LifeLock’s CEO have led many media observers, bloggers and consumers to conclude that the popular identity theft protection service simply doesn’t work. In particular, many of these critics have taken the stance that the LifeLock $1 million service guarantee is an empty corporate promise that doesn’t actually provide any protection to LifeLock subscribers.

We have spent several hours researching and analyzing the details of the LifeLock $1 million service guarantee. Our goal is to provide our readers with a balanced view on exactly how the guarantee works, what it does and does not cover and generally give enough insight for the average consumer to make a decision for themselves as to whether or not LifeLock is the right identity theft protection service for them.

It is important to point out at the outset that, according to statistics made available by LifeLock’s CEO Todd Davis, only 105 of the approximately 1 million LifeLock subscribers have required the serviced offered by the $1 million guarantee since the company was founded in 2005. This means that about 0.01% of LifeLock subscribers have been victimized by identity theft since the companies inception. We feel this represents a pretty strong track record in identity theft prevention when you consider that about 4% of Americans are victimized by identity theft each year according to recent data published by the Better Business Bureau.

Another way to look at it is that the overwhelming majority, roughly 99.99%, of LifeLock subscribers will never require the services provided by LifeLock’s $1 million dollar service guarantee. While we believe that every LifeLock subscriber should fully understand the full inner workings of the LifeLock guarantee, it is also important to realize that most subscribers will never need to use it.

In the unfortunate case that a LifeLock subscriber is victimized by identity thieves, they 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. While this step may add time to the recovery process it serves an important role of making sure that no subscriber attempts to game the system by reporting bogus claims in an attempt to fraudulently benefit from the LifeLock guarantee. In our opinion, this is an important step because it ensures that valid claims get the full attention of LifeLock’s recovery specialists without being bogged down by false claims.

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 victims behalf to obtain information, complete applicable forms and generally guide the subscriber through the recovery process. According to LifeLock, most identity recovery cases are resolved within 30 days of the $1 million service guarantee being activated.

While much of the heavily 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 their identity. First, the subscriber must file a police report in person with their 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. The victim must also fully co-operate with LifeLock’s recovery efforts by signing, notarizing and returning applicable document as requested by their recovery specialist.

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, passports, credit cards or other important documents as necessary
• Paying up to $1 million dollars to restore the identity of the victimized subscriber

That last point is what causes much of the confusion, discussion and controversy related to LifeLock’s service guarantee. The guarantee is not an insurance policy. Rather, it is a contractual commitment backed by LifeLock that agrees to spend up to $1 million over the lifetime of any one LifeLock subscriber to recover their identity.

To be clear, LifeLock’s $1 million service guarantee will NOT cover the following costs:

• Lost wages, business profits, loss of business or lost opportunities
• Direct out-of-pocket expenses such as postage stamps, gas or mileage costs or notary public fees
• Any direct restitution for any actual monetary losses incurred as a result of the identity theft incident

Many of LifeLock’s critics point out that the lack of restitution for stolen funds or fraudulent charges is a major failing of the $1 million service guarantee. What they don’t point out is that many financial institutions will not hold consumers liable for fraud committed against their accounts. For example, if a criminal makes credit card charges in your name you will typically not be required to pay for those charges if you report them in a reasonable time period (typically 30-60 days). Policies vary widely, so it is important to research and understand how your own financial accounts deal with fraudulent activity.

After fully reviewing all aspects of the LifeLock guarantee we believe that it is much more extensive then some of the company’s critics may have you believe. It offers extensive support and assistance and covers many costs related to identity recovery. Additionally, LifeLock’s positive track record of identity theft prevent means that 99.99% of their subscribers will never need to use the guarantee in the first place.

We feel that educated consumers that have done their research and understand the coverages and limitations of the LifeLock $1 million dollar service guarantee should feel very comfortable with the service. However, it is ultimately up to each consumer to decide whether LifeLock or any identity protection theft service meets their individual needs.

To learn more about LifeLock or other identity theft protection services, visit our identity theft protection service guide.

• Debunking the case against LifeLock
• Reader Question: How can LifeLock help me if I have already been a victim of identity theft?
• Reader Question: Which identity theft protection service is best if I’ve already been victimized?
• LifeLock CEO to answer questions and address criticisms in town hall meeting this Friday
• ID Watchdog identity theft protection service review

Debunking the case against LifeLock

Posted by Joe on May 29th, 2008

Todd Davis, the CEO of identity theft protection service LifeLock, appeared on the nationally televised Today Show last Friday to publicly address a handful of recent lawsuits against the company. Given that we have gone on the record stating LifeLock is the best overall value in identity theft protection, we thought we would take the opportunity to address three common criticisms we hear from LifeLock’s detractors by researching and presenting the facts to our readers.

Common Criticism #1: LifeLock charges consumers for services that they can get for free.

Some of the identity theft protection tools that LifeLock uses are freely available to consumers. In particular, LifeLock’s critics like to point out that anyone can set their own fraud alerts or order their free annual credit report from the three major credit bureaus. There are two points to address here.

First, while it is true that consumers can set their own fraud alerts, for example, that doesn’t mean that it is a trivial process. We encourage anyone that is not familiar with the process of setting a fraud alert to read our fraud alert and credit freeze guide.

LifeLock is very upfront about the specific services they provide and which of those that can be done for free by consumers. The analogy that Davis has publicly used in the past is that LifeLock is a service provider and no different than paying someone to change your oil instead of doing it yourself.

Second, these are not the only services that LifeLock provides to its subscribers. LifeLock offers an number of features that help prevent and detect identity theft crimes and help victims recover. For example, LifeLock’s eRecon service scours the Internet looking for improper or criminal uses of their subscribers’ personal information such as credit card numbers. WalletLock, a LifeLock service that replaces all of an individuals documents such as credit cards, driver’s license, Social Security card, credit cards and passport, is also available to every LifeLock subscriber.

It is clear that LifeLock does provide many useful services that would not be available to consumers without incurring some cost in time and/or money. Ultimately, LifeLock provides a service for consumers that want the peace of mind that comes with having a team of experts protect and, if needed, recover their identity for them.

Common Criticism #2: LifeLock can’t be effective at identity theft protection because many subscribers, including their CEO, have been victimized by identity theft.

It is true that LifeLock subscribers, including the company’s CEO Todd Davis, have been victimized by identity thieves. However, publicly available data shows that LifeLock subscribers are nearly 400 times LESS LIKELY to be victimized by identity theft than non-subscribers.

In the interview with the Today Show’s Matt Lauer, Davis reveals that 105 of LifeLock’s subscribers have been victimized by identity theft. That means that approximately 0.01% of LifeLock subscribers, or about one in every 9,524 subscribers, have been victimized. Now, compare that with recent statistics published by the Better Business Bureau which found that 4%, or one in every 25, American adults had been victimized by identity theft in 2006, the most recent statistics that were available. Again, this means that LifeLock subscribers are almost 400 times less likely to fall victim to identity thieves than the average American adult.

In Davis’ case, a Texas man took out a $500 payday loan in the LifeLock CEO’s name using the Social Security number that is featured prominently in the company’s marketing campaigns. Since the payday loan company did run a credit check on the loan request, the fraud alerts on Davis’ credit report were not triggered and the transaction could not be prevented. To be clear, there is no identity theft protection service on the market today that could have prevented this identity theft incident from occurring. However, LifeLock’s recovery services immediately went into effect and Davis’ identity was recovered without costing him any time or money.

Davis has publicly commented on the incident many times and has been clear that there was no lasting impact on his identity or credit file as a result. “There’s nothing on my actual credit report about uncollected funds, no outstanding tickets or warrants or anything,” he said.

While it would be better if no LifeLock subscriber was ever victimized by identity theft, the reality is that no identity theft protection service can be 100% effective. The goal of these services is to minimize the chanced of identity theft as much as possible, and we’d say minimizing your odds of being a victim 400 times is awfully effective. Plus, identity theft protection is only one facet of the company’s service. LifeLock also offers a $1 million service guarantee which pays to recover the identity of any subscriber that is victimized while a member of LifeLock. We will address the critic’s view of the $1 million guarantee below.

Common Criticism #3: LifeLock’s “$1 Million Service Guarantee” isn’t worth the paper its printed on.

LifeLock’s $1 million guarantee is a straightforward contract between LifeLock and its subscribers in which they commit to spending up to $1 million to recover the identity of any subscriber that falls victim to identity thieves. This does not mean that LifeLock writes a check in the amount of $1 million to any subscriber whose identity is stolen. But, it does mean that LifeLock will provide victims with access to experts and professionals will work to recover the victim’s identity on LifeLock’s dime. The guarantee is easy to read and understand and is prominently published on LifeLock’s website.

All of the 105 LifeLock subscribers that have fallen victim to identity theft to date, including Davis himself, were covered by the company’s service guarantee. “What’s important is the whole incident proves that LifeLock works, because I was never out a dime of my own money or a minute of my own time,” Davis said. “LifeLock protected me and the other 104 members exactly as they promised.”

As always, we encourage consumers to develop their own opinion based off of the facts at hand. You can view Davis’ Today Show interview below.

To learn more about LifeLock or other identity theft protection services visit our identity theft protection service comparison and reviews.

• Reader Question: How can LifeLock help me if I have already been a victim of identity theft?
• LifeLock CEO to answer questions and address criticisms in town hall meeting this Friday
• LifeLock’s $1 Million Guarantee - Separating Fact From Fiction
• LifeLock CEO addresses lawsuits and critics head on
• LifeLock… Now with frequent flier protection!