The marketing was impressive. LifeLock’s CEO Todd Davis was so sure that his company’s identity theft prevention services were so effective that he publicly displayed and broadcast his own social security number. It was an effective ad campaign, and LifeLock brought in a lot of business because of it. Recent government action against LifeLock suggests that some of their services were overstated, which warrants a closer look at what LifeLock claims to do and what you get for your money.
What LifeLock Claimed: Absolute Protection
The Federal Trade Commission charged that while LifeLock told customers it could provide absolute protection from identity theft, yet it provided less protection from identity theft than it promised. The FTC also stated that LifeLock made claims about its internal data security that were untrue.
The FTC and 35 state attorneys general charged that LifeLock’s promises were deceptive and untrue, as they overstated their ability to prevent identy theft. As a result, 957,928 customers will be receiving refund checks of $10.87 each. LifeLock will pay $11 million to the FTC to cover the cost of the refunds and the investigation. Another $1 million will be shared by attorneys general in 35 states to cover their own investigatory costs. To claim your refund, call 1-888-288-0783 or go to www.ftc.gov/refunds.
How Much Does LifeLock Cost?
For customers to receive a $10.87 refund, I wanted to see what they actually paid for the service. It turns out that LifeLock currently provides two tiers of protection.
Their basic service costs $10 a month, or you can get a month free by paying $110 for a year of coverage. For this, you receive LifeLock’s identity theft protection services and a $1 million total service guarantee. While that sounds good, it tells me nothing of what is being done to protect my identity and what LifeLock would be prepared to do to restore my life should my identity get stolen.
For $15 a month, you get the same protection plus access to their advanced “LifeLock Command Center protection suite.” Again, they give you a month free if you pay $165 in advance for a year of coverage.
What Does LifeLock Actually Do?
LifeLock removes your name from the solicitation lists sold by the three main consumer credit bureaus. You can do this for free by calling 1-888-5-OPTOUT (1-888-567-8688) or registering online to opt out. You may also remove yourself from other marketing lists by registering with the Direct Marketing Association’s Mail Preference Service. A $1 fee will remove your name for 5 years.
LifeLock used to set up and automatically renew fraud alerts with the credit bureaus every 3 months. They backed off of that practice after legal challenges from the credit bureaus. You however can do this for free by placing alerts directly at any of the three main consumer credit bureaus:
The nice part about fraud alerts is that you only have to contact one bureau. The other two will be notified and will also place fraud alerts on your profile automatically.
The free credit reports are guaranteed to you anyway by the Fair and Accurate Credit Transactions (FACT) Act. Simply visit the Annual Credit Report Service for your free reports each year.
Finally, LifeLock offers a “WalletLock” service in which they contact your card issuers the moment you report your wallet lost to LifeLock. While it is nice to have a central place to call, you can do the same yourself by keeping an organized list of all cards and contact numbers in a safe place should you ever lose your wallet.
Is LifeLock Worth It?
The short answer, it depends. It is not worth it for me since I take many precautions to avoid identity theft. I store sensitive documents such as social security card and passport in a safe and locked location. I shred sensitive documents and credit applications using a high security shredder. I only keep a couple of cards on hand at any time and never carry my social security card with me. Also, I only give out personal private information when it is necessary.
If you are the type that you just want someone to do everything for you, and you are willing to pay over a hundred bucks a year for that privilege, then maybe it is for you. The company has a “A+ rating” with the Better Business Bureau. Outside of questionable marketing claims, LifeLock appears to provide good overall service. In other words, they provide mostly a one-stop-shop for what you can largely do on your own.
LifeLock is a registered trademark of LifeLock, Inc.
Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.
Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.
In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.
Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!
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