Will ID Theft Protection Save Your Digital Bacon?

Is Identity Theft Protection Effective?

Todd Davis, founder of identity theft protection service LifeLock, became 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! In 2010, 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! In fact, LifeLock's own advertising carries the disclaimer that "no one can prevent all identity theft or cybercrime, and LifeLock does not monitor all transactions at all businesses." (LifeLock was acquired in 2017 by Symantec, makers of Norton computer security products, and is now called NortonLifeLock.

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 data 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 can do your best to secure your computer with antivirus software, use strong passwords, and avoid clicking suspicious links, but you also have to rely upon the security measures taken by those entities that are supposed to protect you. Businesses, government offices, and even credit bureaus have been lax about protecting personal information from theft. (See Equifax Takes The Data Breach Cake and Experian Glitch Exposes Credit Files.)

According to researchers, about 10% of Americans fall victim to identity theft each year. The Identity Theft Research Center reports that there were 2,850 data breaches, resulting 1.3 billion victim notices going to individuals. 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. Lifelock's Dark Web Monitoring searches the dark web where information gleaned from data breaches is commonly sold. If your information or "unusual activity" is found, Lifelock will alert you to it; effectively asking, "Hey, did you really do this?" If you didn't, then some thief may have, and it's time to hit the panic button. Data points most commonly exposed are names, social security numbers, birth dates, home addresses, and driver license numbers. Data breaches can also contain medical history, bank account numbers, and insurance details.

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. You may be prompted to change a password if it appears that an account in your name was compromised.

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.
The Lifelock Standard plan says it covers "up to $1 million for lawyers and experts" and will reimburse for up to $50,000 in stolen funds and personal expenses related to an ifentity theft incident. The Advantage and Ultimate plans have higher reimbursement levels.

But how far they'll actually go depends on where you live, and the plan you've selected. The NortonLifelock Licensing and Service Agreement is 11,377 words of legalese, and the document entitled Evidence of Coverage: All Members Except NY and WA State Residents spells out how much they will pay out to help you, based on your membership in one of the 24 plans listed. (See the Legal Information and Resources page if you live in New York or Washington State.)

Interestingly, in the Exclusions section, you'll find that the policy does not cover losses arising from nuclear radiation, radioactive contamination, terrorism or "loss or damage resulting from or arising out of a Cyber Attack." Hmmm, identity theft perpetrated via the Internet sounds like a cyber attack.

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've been a customer for several years, but there have never been any significant alerts. 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.

Comparing LifeLock and Other Identity Protection Services

LifeLock by Norton (Standard Edition) has a $12 monthly base subscription, provides a broad range of identity theft protection features, including Social Security number alerts, data breach notifications, and dark web monitoring. Additionally, subscribers receive $1 million in identity theft insurance protection, along with an additional $50,000 for reimbursements of stolen funds and necessary costs in the event that identity theft occurs. Advanced features, including "Buy Now, Pay Later" alerts, social media and phone takeover monitoring, fraud alerts for crimes committed in your name, and activity notifications for credit, checking, and savings accounts, are available with LifeLock's Advantage or Ultimate Plus plans, which cost $23 and $35 per month, respectively.

Although LifeLock is considered the industry leader, it has a bit of checkered past. As I mentioned earlier, LifeLock was charged by the FTC for misleading marketing in 2010 after making a claim that it could shield customers from ALL forms of identity theft. And that was wrong, the FTC said. In response to the FTC lawsuit, LifeLock agreed to pay $12 million. LifeLock was penalized an additional $100 million five years later for not adhering to the FTC's earlier decision.

After his own identity was stolen, CEO Hari Ravichandran founded Aura. When compared to competing identify protection services, Aura offers excellent value. In addition to keeping an eye on your Social Security number and dark web criminal activities for any indications of identity theft, Aura scours the web and data breaches for signs of your personal data. Home and Auto Title Monitoring is part of Aura's identity protection service. Additionally, identity theft insurance up to $1 million per adult is provided to Aura customers. Benefits including a virtual private network, password manager, email aliases, and antivirus protection for up to ten devices per adult are all included in Aura's subscriptions. Aura provides monitoring options for all of the "Big Three" credit bureaus -- Experian, Equifax, and TransUnion.

IDShield offers four plans—two for people and two for families. The price varies based on how many credit bureaus you wish to have monitored. Individual plans priced at $15/month include one credit bureau. To monitor all three (Equifax, TransUnion, and Experian) costs $20 a month. Credit freezing, hard inquiry alerts, surveillance of public data and Social Security numbers, and dark web monitoring are included in all plans. IDShield's identity restoration tools are where it truly excels. IDShield provides subscribers with up to $3 million in identity theft insurance coverage to cover attorneys and specialists required to recover identities, as well as identity theft consultation services, unlimited customer assistance, and licensed private detectives assigned to your case.

The credit bureaus offer some competing identify protection services (TransUnion IdentityForce, Experian IdentityWorks, and Equifax ID Patrol) but I don't feel comfortable trusting them to protect me, when they've all been proven unable to protect themselves from various types of customer data exposure.

Here's the bottom line... Identity theft protection services such as Lifelock, Aura, and IDShield 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, $20 or $80 a month that may cost.

Do you have something to say about identity theft? Have you had an incident that was successfully resolved by an identity theft protection provider? Post your comment or question below...