Preventing Online Identity Theft With Insurance From LifeLock

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 7

It’s time again to deviate a bit from the de facto stock market speak du jour.  I want to discuss Identity Theft.  I know, it won’t happen to you.  We all tend to think that way.  BUT it can and COULD happen even to you.  Identity theft is something I’ve been increasingly concerned about ever since I noticed multiple charges on my credit card from companies I have never done business with.  This came just a few weeks after my brother had checks stolen from his mailbox.  How the thieves were able to retrieve my credit card info I will probaby never know, but it’s unnerving to say the least.  What other info do they have? I was forced to close the account which was a minor headache.  Identity theft is no minor headache.  It can ruin lives, but the good news is that the growing problem (now 10 million identity theft victims a year!) has created some solutions.

Government is starting to step in and force the credit bureaus to offer a credit freeze.  According this article "Consumers can have a sigh of relief as of November 1st, 2007. All three credit bureaus gave into security freeze options for all states, including the 11 states without laws, before they all forced it by mandatory laws.

Now that the security freeze is available to everyone, here is how it works: Once a security freeze is desired a consumer needs to write a letter to each credit bureau and pay a fee of about $10 for each bureau. Once the freeze is in place, it prevents the big three credit bureaus from releasing information without the consent of the consumer.

A consumer can allow access to their credit report to either a specific business or organization, or they can choose a specific amount of time they want their credit report to be available without authorization. When a consumer freezes their credit report they are given a unique PIN that is used to lift the security freeze. Lifting a security freeze is also referred to as thawing your credit report."

Writing and paying each credit bureau for the freeze seems like a hassle to me.

Perhaps the better solution is going with a company like LifeLock which automates the process of protecting your identity, not to mention putting a halt to all that junk mail.  WallStrip founder Howard Lindzon is an investor and I first read about this service at his blog.  You can use the discount code "wallstrip" for a small discount.  I personally have signed up and the $100 bucks a year is a small price to pay knowing I’ll never have to worry about identity theft again. 

The LifeLock service does the following:

1. Insures you up to 1 million dollars in case of identity theft
2. Sets fraud alerts so that you are contacted when new lines of credit are requested
3. Provides credit reports
4. Removes your name from junk mail lists (worth the cost right there!) in addition to pre-approved credit card offers
5. 24 hour support

There are a couple other companies out there offering similar services but LifeLock appears to the best of the bunch.  I highly recommend checking them out and protecting your identity.

Additional Resources:

Federal Trade Commission – Identity Theft
Department of Justice Identity Theft
Non-Profit ID Theft Resource Center

More on this topic (What's this?)
Flagging Yourself for Identity Theft
Credit Monitoring Service
Identity Theft Insurance
A lost laptop, a $54 million lawsuit
Read more on Identity Theft, Insurance at Wikinvest

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Comments on Preventing Online Identity Theft With Insurance From LifeLock »

December 14, 2007

Bernard @ 10:49 am

Great information and identity theft and Lifelock. Lifelock is the leading provider of identity theft prevention and Identity thieves hate them. Like you said for $100/year it is a no brainer knowing that you do not have to worry about identity theft anymore. Peace of mind period. Thanks

December 15, 2007

G.B. Mann @ 5:58 pm

Well, this is begining o be the joke of ID theft… The thieves love LifeLock….. The CEO begcame a ID theft Victim… so what do they really offer consumers…. i.e. nothing but an advertsiing program….. if he became a vicitm, how can he really helap the consumer s the USA…. it is a numbers game, if you get 100,000 people payiny $100 a year and if you read the fine fine print of their $1,00,000 guarantee….. they don’t cover anything that a $500.00 recovery does not cover, when the CEO became a victim, they paid National ID Recovery to solve his problem for $500.00 so what is the big deal about $1,000,000…. it is an ad campaign to snowball consumers that all.

Tate Dwinnell @ 7:22 pm

Thanks for the heads up on this. I was not aware of it. Here’s a link from Wired to the story which also discusses the resignation co-founder Robert Maynard due to a federal investigation which includes allegations of stealing the identity of his own father?!!GEEZ! Why does this kind of thing not surprise me anymore?
http://blog.wired.com/27bstroke6/2007/06/lifelock_founde_1.html

That being said, you can’t argue that LifeLock doesn’t provide some value. There will always be loopholes and the reason the thieves were able to get a loan in his name is because the creditor didn’t run a credit check which probably doesn’t happen very often. I imagine that thieves have been trying to sucker him for a long time. Putting your social online might be a decent marketing gimmick but at what price. I see this is just one more way to help defend my info and hopefully stop all the junk that comes my way.

Interesting stuff.. thanks again.

January 20, 2008

KnifeQuack @ 8:26 am

LifeLock is useless except that one million$$ insurnace. All the services that they are offering is FREE, one who is not lazy can do themselves. Say Free Credit reports, credit alerts, Stopping free pre approved offers.. all are free for any one, they are just packging these and adding a one million $$ insurance on the top of it and selling it like a crazy.. nice business idea but only for lazy customers..

February 14, 2008

Rob of Arizona @ 2:16 am

There are four other areas of Identity Theft that are far more serious and damaging. Financial credit and bank fraud are only about 27% of what the thieves are after.

Medical Identity Theft is like a million dollar credit card and you can actually die from this type of ID Theft. Medical IDT is not monitored by your credit repositories. Once your medical transcripts have been used and changed the only way you can review them is by hiring an attorney. The reason is because it now would be infringing on the other persons privacy. Stupid law I know but nonetheless it’s the law. The problem here is that your blood type can be changed, People have died pretty darn quick by receiving the wrong blood. Your lethal allergies to prescriptions drugs can be changed. Health insurance companies may drop you for over using the service, and you only find out about it when you need it the most. In an emergency, or when the collectors come to collect 13 months after your cancer or liver treatment that you never had. At that point you owe the full amount and your going to need an attorney to resolve this, not credit monitoring or credit lock down service.

Character/Criminal IDT, is when someone gets in trouble and says they are you. You don’t find out about it until your being arrested at a routine traffic stop. What do you tell the police officer, “You’re making a mistake, and you have got the wrong person.” That’s original! Your credit repositories do not monitor this either.

Social Security IDT is only partly monitored by your credit repositories for credit related issues. People have written death claims and cashed in on other peoples life insurance policies. Your credit repositories do not monitor this one.

Your credit repositories do not monitor Drivers License IDT either. Same as Character/ Criminal IDT except it affects your insurance as well. Imagine someone involved in a fatal accident says they are you, Gives your name, Social Security Number, and they give a false address so you never get anything in the mail to inform you of your court date for an incident you were never involved in. Finally they don’t show up to defend you at your trial so the judge writes a warrant for your arrest on site. Good luck! You’re going to need an attorney.

It will cost you $1400 before you hire an attorney just to get started cleaning these up and take a minimum of business 400-600 hours if you know what your doing and nothing else is happing to you like your sitting in jail or more IDT’s. Your going to need to hire attorneys paid by you, notaries and spend countless hours out of work to clean all this up between the hours of 8am and 5pm Monday through Friday.

When are you supposed to be at work again? That would be like taking off everyday all day for four months. I’m sure your understanding company will pay you in full for all that time off to fix your life. It will be like a vacation. Right? Wake up, your going to get fired, companies don’t want criminals working for them. And they don’t pay people who chose not to show up. So how many attorneys work for free?

The truth is there is absolutely no way in the world to prevent or stop Identity Theft. None. Locking out your life from credit accounts and credit monitoring are only preventive tools in one small area of IDT. It won’t help you at 10pm on a Friday night when the police are arresting you or your teenage kids as criminals wanted for armed robbery and murder in four states and reported as armed and dangerous criminals.

Also you should have your attorney read and disclose the fine print of your IDT Prevention contracts before you sign them. The contracts may not do what you think they do or the companies may not be so easily responsible as advertised once they get you on board. A lot of companies are jumping on board the Identity Theft Band Wagon and only very few can effectively deliver what they promise. I find that more advertising and the more they spend on radio ads the less they do for you when you need them. Your basically paying for that adds.

Two key words to look out for please stay away from these types of services are Resolution and Reimbursement. They typically mean in the fine print that you have to put out all the up front money to resolve your situation and there is usually a high minimum amount required. Then the company will review your case and determine for themselves if you should receive any of the money you invested into resolving the case back. It never means you get the money lost from the Identity Theft back. You have to do that all on your own. One company’s fine print says something along the very fine lines that they solely hold the right to determine if they were responsible for letting the IDT happen to you. If determined it was their fault they will give you a million dollars. But they will never be able to prove that they could have prevented it from happening so they are in fact never responsible to pay out one million dollars to anyone. Don’t take my word for it read the fine print of your contracts before you sign them. If you can’t, have your attorney read them for you.

Ultimately you have to make the best choice for you and your family. I am just suggesting before you put your eggs all in one basket, you should know what all the different eggs are and what eggs the basket holds. Looking for a solid Restoration program that covers all the areas of IDT is a great place to start. The contracts fine print should reflect the bold print that gets you all excited. After all it’s only your quality of life on the line.

Tate Dwinnell @ 7:52 am

Great thoughts on this Rob, thank you. I hadn’t thought about medical theft.. scary stuff indeed. My girlfriend is a consultant in the healtchare industry and does a lot of IT work. I’ll have to ask her if companies are aware of this and doing something about it.

October 13, 2008
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