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Effectiveness of LifeLock to Prevent Identity Theft?

Tuesday, May 18, 2010 - 6:38 PM
Remember those LifeLock commercials with the company's CEO, Todd Davis, in which he disclosed his social security number to prove the effectiveness of LifeLock? According to this Phoenix New Times article, he was the victim of identity theft more than what was disclosed:
The fact that Davis has fallen victim to so many con artists illustrates how LifeLock cannot steel anyone from identity theft. Even with new features intended to improve upon LifeLock's original service, the company failed to save the boss' identity from getting used over and over again.
Ken TuminKen Tumin5,471 posts since
Nov 29, 2009
Rep Points: 125,634
1. Tuesday, May 18, 2010 - 8:41 PM
Thanks for the information on this article. I read it and decided to immediately cancel my LifeLock membership. I was having doubts about the benefit, especially since two of the three credit reporting agencies were no longer cooperating with LifeLock. Experian doesn't honor requests for free credit report made through LifeLock at all; and TransUnion will only send one free report per year, regardless of whether the request is made directly or through LifeLock. So, is the membership worth it? I finally decided that it was not.
AnonymousAnonymous2,282 posts since
May 9, 2010
Rep Points: 3,951
2. Tuesday, May 18, 2010 - 9:14 PM
A discussion on effectiveness of these programs is incomplete without an examination of their backstop provisions - that is, insurance.  Since you can never fully get "under the hood" of how specifically they safeguard you, you can evaluate specifically how they'll cover you if something goes wrong. 

Identity Guard is the outfit I use.   It is the only service I have found that offers a meaningful insurance policy inclusive in their monthly fee that would cover debit card theft/hack.  Their coverage is as follows:

Aggregate Limit of Insurance: $ 1,000,000 per policy period
Lost Wages: $ 1,000 per week, for 4 weeks maximum
Travel Expenses: $ 500 per policy period
Elder Care and Child Care: $ 2,000 per policy period
Deductible $ 0 per policy period

Their policy states:  "We shall pay you for the following losses incurred as a result of a Stolen Identity Event", defined as follows:

Stolen Identity Event means the fraudulent use of your name, address, Social Security number, bank or credit card account number or other personally identifying information or other method of
identifying you. This includes, but is not limited to, the fraudulent use of your personal identity to establish credit accounts, secure loans, enter into contracts or commit crimes. A Stolen Identity Event
does not include the theft or unauthorized or illegal use of your business name, d/b/a or any other method of identifying your business activity.

So far so good.  If your debit card gets hacked, that would seem to fall into the definition of a Stolen Identity Event.  Then what about coverage?  One of their defined loss categories is as follows:

Unauthorized Loss of Funds Reimbursement
The principal amount of money, exclusive of interest and fees, incurred by you and caused by an Unauthorized Loss of Funds Event first occurring during the policy period for which you have sought reimbursement from the Outside Entity which issued the Access Device and holds the Account from which funds were stolen, and for which you have not received reimbursement from any source.

An Unauthorized Loss of Funds Event means a Fund Transfer from your Account initiated by a person other than you without the actual authority to initiate such transfer and from which you receive no
benefit. Unauthorized Loss of Funds Event does not include a Fund Transfer initiated: 1) by a person to whom you knowingly furnished the Access Device to your Account, unless you have notified the
Outside Entity that transfers by such person are no longer authorized; 2) with fraudulent intent by you or any person acting in concert with you; 3) by the Outside Entity or its employee; or 4) from any
business or commercial account.

I have asked for and received in the mail a copy of the Master Policy.  I have reviewed it and have found no fine print to negate the above.  IMHO once you list your debit cards on their site you are covered under the million dollar policy.  I have not had to find out whether they'll come through in the case of a hacked rewards checking account.  I hope I never have to.  But these days, rewards checking is the only decent, short-term, liquid, principal guaranteed return out there.  I pursue it vigorously using six accounts to their max.  This Identity Guard service has me sleep a lot better at night.

My .02 for what it's worth.
AnonymousAnonymous2,282 posts since
May 9, 2010
Rep Points: 3,951