Don’t Bother to “LifeLock” Yourself

by on May 19, 2008 · 18 comments

I’m often asked what one can do to avoid becoming the victim of “identity theft” – actually identity fraud, the use of one’s personal information to impersonate, typically in the financial services world.

My advice is usually “not very much,” and I specifically recommend against any of the credit or ID theft monitoring services. My rough cost-benefit analysis of these services is that it isn’t worth $8 or $10 per month to avoid the relatively low risk of being a victim of any kind of serious identity fraud. Credit card fraud is the most common form of ‘identity theft.’ It threatens no liability and only a little bit of inconvenience to most consumers in the United States – consumers that are prudent, anyway. And I’ve never understood what these services would or could do to prevent or mitigate a true impersonation fraud.

The one thing they might do is place “fraud alerts” on your identity with credit bureaus, but that’s burning the village to save it. Anticipatorily sullying your own credit file may reduce your likelihood of being a subject of identity fraud, yes, but it destroys the benefit of having good credit in the first place – that’s what you’re trying to protect.

Now comes news that LifeLock, one of the most prominent purveyors of “proactive identity theft protection,” is being sued in several states. The allegations cluster around . . . oh, I’ll put it this way: B.S.ing people into paying them money. I don’t know whether the specific allegations are merited, or whether selling people assurance about something they needn’t fear is actionable, but my gut is that LifeLock is closer to a scam than a real service. It’s certainly not worth $100+ a year.

Check your bank and credit card statements when they come. You might get a copy of your credit file from each of the major credit bureaus if you’ve got a big financial transaction like a mhome purchase or refinancing. Other than that, my advice is to relax and have a good time. You’re not going to avoid being a subject of identity fraud using these services, and only in the rare, exotic case will being a victim of identity fraud cause you a great deal of harm.

  • http://www.cybertelecom.org/ Robert Cannon

    Good words. My other bit of advice – DO NOT give personal information to anyone that does not need it. Is that video rental club asking for your social security number? Dont give it to them. Is that store asking to see your drivers license in order to expedite a return? Dont give it to them. If they must see the license, cover the license number. If this is a problem, LIE! Protecting your identity by opposing privacy intrusions is hard; protecting your identity by massive misinformation is a solution.

  • Ryan Radia

    I agree with you about LifeLock, Jim. This service is not worth it. Many banks already provide superior services for customers at a more reasonable price point. Identity theft is a risk and can be a hassle, but as long as you keep your SS# safe, as Robert points out, chances are you’ll be fine.

  • http://www.cybertelecom.org/ Robert Cannon

    Good words. My other bit of advice – DO NOT give personal information to anyone that does not need it. Is that video rental club asking for your social security number? Dont give it to them. Is that store asking to see your drivers license in order to expedite a return? Dont give it to them. If they must see the license, cover the license number. If this is a problem, LIE! Protecting your identity by opposing privacy intrusions is hard; protecting your identity by massive misinformation is a solution.

  • Ryan Radia

    I agree with you about LifeLock, Jim. This service is not worth it. Many banks already provide superior services for customers at a more reasonable price point. Identity theft is a risk and can be a hassle, but as long as you keep your SS# safe, as Robert points out, chances are you’ll be fine.

  • http://www.techpolicycentral.com Natalie Fonseca

    Hi Jim,

    Interesting post. I have a followup question I was hoping you would answer re: the credit agency reporting services (not LifeLock but the other monitoring services by TransUnion, Equifax, etc.)…other than thinking that it’s not worth the money, are you saying that your credit rating can be hurt just by signing up for these services?

    Also, couldn’t agree more about being careful when it comes to handing out your SS number. I’ve been shocked by how often it’s requested on just about any type of paperwork.

  • http://www.techpolicycentral.com Natalie Fonseca

    Hi Jim,

    Interesting post. I have a followup question I was hoping you would answer re: the credit agency reporting services (not LifeLock but the other monitoring services by TransUnion, Equifax, etc.)…other than thinking that it’s not worth the money, are you saying that your credit rating can be hurt just by signing up for these services?

    Also, couldn’t agree more about being careful when it comes to handing out your SS number. I’ve been shocked by how often it’s requested on just about any type of paperwork.

  • Jim Harper

    Sorry if I was unclear. I was talking about putting fraud alerts on your file. It doesn’t hurt your credit rating, but it makes your good credit rating harder to use, which is the point of having a good credit rating.

    Keeping a fraud alert on your file as a routine matter is like have rock hard abs and never taking your shirt off. Not the best analogy ever – in fact, it’s pretty bad – but it’s what came to mind . . .

  • http://www.techpolicycentral.com Natalie Fonseca

    Thanks, Jim. I didn’t understand how the fraud alert process worked — your abs analogy did the trick. :-)

  • Jim Harper

    Sorry if I was unclear. I was talking about putting fraud alerts on your file. It doesn’t hurt your credit rating, but it makes your good credit rating harder to use, which is the point of having a good credit rating.

    Keeping a fraud alert on your file as a routine matter is like have rock hard abs and never taking your shirt off. Not the best analogy ever – in fact, it’s pretty bad – but it’s what came to mind . . .

  • http://www.techpolicycentral.com Natalie Fonseca

    Thanks, Jim. I didn’t understand how the fraud alert process worked — your abs analogy did the trick. :-)

  • Samiullah

    I review this site and getting good idea and view that written here, life lock is good industry taking good steps keep monitoring identity thieves and it always protect from wrong hands’ and taken full service . No one stop identity theft, but we almost completely cover it and its life lock guarantee. So we suggest visit this site hope you getting more knowledge. http://www.identitytheftprotectionlock.com/

  • Samiullah

    I review this site and getting good idea and view that written here, life lock is good industry taking good steps keep monitoring identity thieves and it always protect from wrong hands’ and taken full service . No one stop identity theft, but we almost completely cover it and its life lock guarantee. So we suggest visit this site hope you getting more knowledge. http://www.identitytheftprotectionlock.com/

  • David M.

    These guys are as much of a scam as identity thieves themselves. A half hour on the phone with their member services department proved that to me. I had my info stolen and someone fraudulently signed up a LifeLock account in my name (ironic, no?). These guys wouldn't lift a finger to help me out, it was obvious that they could care less, they got their money and were happy.

    Everyone, just so you know, all they do is sign up for that 90 credit fraud alert for you every 90 days. They sign you up with their phone number and then call you if they get a call. Guess what? You can just sign up your own phone number and get the exact same service for free. Just add a recurring event to your Google Calendar to fill out the online form quarterly and you're done. Not only is this cheaper, but you don't have to give all of your confidential info (e.g. SSN) to a bunch of scammers (e.g. LifeLock).

  • David M.

    These guys are as much of a scam as identity thieves themselves. A half hour on the phone with their member services department proved that to me. I had my info stolen and someone fraudulently signed up a LifeLock account in my name (ironic, no?). These guys wouldn't lift a finger to help me out, it was obvious that they could care less, they got their money and were happy.

    Everyone, just so you know, all they do is sign up for that 90 credit fraud alert for you every 90 days. They sign you up with their phone number and then call you if they get a call. Guess what? You can just sign up your own phone number and get the exact same service for free. Just add a recurring event to your Google Calendar to fill out the online form quarterly and you're done. Not only is this cheaper, but you don't have to give all of your confidential info (e.g. SSN) to a bunch of scammers (e.g. LifeLock).

  • David M.

    These guys are as much of a scam as identity thieves themselves. A half hour on the phone with their member services department proved that to me. I had my info stolen and someone fraudulently signed up a LifeLock account in my name (ironic, no?). These guys wouldn't lift a finger to help me out, it was obvious that they could care less, they got their money and were happy.

    Everyone, just so you know, all they do is sign up for that 90 credit fraud alert for you every 90 days. They sign you up with their phone number and then call you if they get a call. Guess what? You can just sign up your own phone number and get the exact same service for free. Just add a recurring event to your Google Calendar to fill out the online form quarterly and you're done. Not only is this cheaper, but you don't have to give all of your confidential info (e.g. SSN) to a bunch of scammers (e.g. LifeLock).

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