Heard this one? "I'm Todd Davis and my Social Security Number is 457-55-5462!" LifeLock is best known for its national advertising campaigns which feature its CEO shouting his own Social Security number to prove the efficacy of the firm's identity theft programs.
Founded in 2005, LifeLock is an industry leader in proactive indentity theft protection. LifeLock has a strong focus on educating consumers and working with law enforcement and elected officials to better understand the increasing threats of identity theft. A multiple award-winning organization, LifeLock has most recently been recognized as a Best Place to Work by the Phoenix Business Journal. LifeLock (www.lifelock.com) is a private company backed by Bessemer Venture Partners, Goldman Sachs and Kleiner Perkins Caufield and Byers.
For a fee, the company once every 90 days asks for a fraud alert on your file by calling Experian, Equifax or TransUnion (the three major credit bureaus) who communicate this information to each other. LifeLock will also contact opt-out mass-mailing organizations on your behalf in order to reduce unwanted mail which can potentially expose your information in the first place.
Filing a fraud alert and signing-up with opt-out services for mass-mailings are both free processes if the customer calls any one of these three credit agencies every 90 days to renew the fraud alert. Or if the customer signs up with such mailing opt-out services by their own effort.
Many people mistakenly think that the company’s well-touted $1 million Total Service Guarantee is insurance, which it is not. Most ID theft plans are what’s known as “restorative” service contracts, which are different from insurance in one special way: with identity theft plans, there is never any direct payment to the consumer. What identity theft companies promise is help and assistance up to a certain dollar amount in the event of a covered and defined ID theft.
LifeLock’s $1 million “Total Service Guarantee” promises to spend up to $1 million to cover the costs of “lawyers, investigators and case managers, but not any direct loss as a result of theft ”if you become a victim of identity theft while a member of LifeLock “due to a failure in our service.” The $1 Million Total Service Guarantee, then, does not cover lost wages or business profits, loss of business or lost opportunities or direct out-of-pocket expenses like gas or mileage to go to local authorities. And under the LifeLock terms and conditions, no money ever passes from LifeLock to a LifeLock member.
The firm charges $10 per month or $110 annual prepaid to become a member.
Javelin Strategy & Research on Identity Theft
According to Javelin Strategy & Research, identity theft is up 22% to a five-year high. Moreover, identity theft has topped the Federal Trade Commission’s list of consumer complaints for the past eight years 9.9 million Americans were victims of identity theft in 2008, which is up 22% from 2007. And, according to The Wall Street Journal, the average information breach to U.S. companies in 2008 was a staggering $6.65 million. Javelin also reports that women are 26% more likely to be victims than men. Households with combined income of $75,000 or more are at higher risk. More than one in ten ID theft victims knew the person who stole their identity and Latinos are the most likely demographic group to become victims. New account theft, which is difficult to detect, occurs when the thief opens new accounts and lines of credit using stolen identities.
Sources: LifeLock ads, May 2009; Javelin 2009 Identity Fraud Survey Report; M.P. McQueen, “Data Breaches Cost Businesses More”, The Wall Street Journal, Feb. 2, 2009.