Do Identity Theft Protection Services Work?
Many people are concerned about identity theft these days, with good reason. If someone assumes your identity they can commit crimes for which you are blamed; raid your bank accounts; even ruin your employment prospects. With so much at stake, many people are paying over $20 a month for identity theft protection services. But are they wasting their money? Here's the scoop…
Is Identity Theft Protection Effective?
Todd Davis, CEO of identity theft protection service LifeLock, is famous for billboards that bore his Social Security Number and a dare to ID thieves: "Steal my identity" which was protected by LifeLock, of course. Well, it turns out they did, at least thirteen times! Earlier this year, LifeLock was ordered by the Federal Trade Commission to pay more than $12 million in fines for false and misleading adverting.
Although LifeLock has since changed their advertising and the means they use to spot identity fraud, no identity theft protection service can absolutely ensure that your identity will not be stolen!
The problem is that your identity can be vulnerable to theft from sources far outside of your control, or even sources that you don't know about. Most identity security breaches occur at merchants, service providers, government agencies, and other institutions to which you have given your personal information, and at still others to whom those entities have given your information without your knowledge.
Most people's identities are exposed to theft in so many different places that it is impossible to protect them all. You have to rely upon the security measures taken by those entities to protect you. Until quite recently, most entities were very lax about protecting personal information from theft.
According to the Identity Theft Research Center, there were 489 security breaches involving the theft of thousands or millions of persons' identities in 2009! Major retailers, banks, government agencies, utility companies, schools, and other institutions left the doors open in often stupendously stupid ways. There is nothing that LifeLock or any other identity theft protection service can do to force third parties to protect your data. So what do you get for your subscription fee (or "insurance policy")?
What Protection is Actually Offered from Identity Theft?
LifeLock and its competitors monitor the activity of your identity online and in the economy. They monitor applications for credit cards, bank accounts, and other financial instruments made in your name. They look for "unusual activity" and alert you to it; effectively asking, "Hey, did you really do this?" If you didn't, then some thief may have. Then it's time to hit the panic button.
If it appears that your identity has been stolen and is being misused, LifeLock can take care of alerting credit card companies and other institutions for you. Accounts can be locked or closed; new credit cards issued; and other measures taken to thwart thieves' use of your identity. But that won't stop a shoplifter who's caught by police from giving them your name and address as his own.
Repairing the damage done by identity theft is a years-long, painful, and expensive process. Some things that you never did may remain on your record forever. In one case, a sex offender used another man's identity, and the innocent man was told by authorities that his name can never be removed from databases of sex offenders.
LifeLock and others in the fraud protection business promise to help you repair the damage if you are a victim of identity theft. But how far they'll actually go is a bit fuzzy. In their Service Guarantee , LifeLock says they'll pay for any lawyers, investigators or consultants that are needed, and that they'll "help you recover the direct losses from the identity theft." But later on that same page, it says "but NOT any direct losses as a result of the theft… NO money passes directly to our LifeLock members." Huh?
I don't personally know anyone who has suffered from identity theft while a LifeLock subscriber, and then tried to submit a claim for help. I do know one person who suspected that her mother (a LifeLock subscriber) had become an ID theft victim. Fortunately, it was a false alarm. But she says that LifeLock certainly did everything she would have wanted, when it came to investigating the situation, and that gave her confidence that LifeLock would have honored their guarantee if there had been a real problem.
Here's the bottom line… Identity theft protection services can provide you with some protection from identity theft, but they cannot guarantee that it will never happen. And if it does, they will provide some assistance in cleaning up the mess, but don't expect them to make it like it never happened. You'll have to decide if that's worth the $10 a month that it costs.
Do you have something to say about identity theft protection? Post your comment or question below…
This article was posted by Bob Rankin on 29 Jul 2010
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Article information: AskBobRankin -- Do Identity Theft Protection Services Work? (Posted: 29 Jul 2010)
Copyright © 2005 - Bob Rankin - All Rights Reserved