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Friday, March 7, 2008

LifeLock = Life Crock?

I was reading some of my favorite blogs and I came across a post about how the blogger had just signed up for LifeLock and they were very happy to have their credit protected for $198/year for the family. Now, I applaud taking extra measures to protect yourself, and I had heard the radio ads so I was interested in what this was all about.

But after I read the post, and then checked out their website I was concerned.

Here is there 5 point plan from their website:

Here is what LifeLock Offers You

  • Proactive Identity Theft Protection
  • Reduce Junk Mail
  • Reduce Credit Card Offers
  • $1 Million Service Guarantee
  • Only $10 per Month

The only problem with that is that is a free service that the credit bureaus offer. People can easily place a fraud alert on their own account, for free, by calling Experian at 1-888-397-3742. A Fraud Alert blocks your name being rented to Credit Card Companies which reduce the junk mail, the proactive protection is LifeLock working with Experian to set the free lock.

So what you get, is the $1 million insurance policy. $198 for $1MM in protection isn't crazy, but like a bad potato the deeper I peeled the more rotten this looked to me...

It must work the CEO gives out his Social Security Number!

Well sort of, this protects you from someone opening a regular credit card at a bank as they all use the big clearing houses like Experian. Actually after the ads hit CEO Todd Davis WAS hit with identity theft as this Phoenix New Times piece explains further. He found out when a collection agency contacted him about a $500 loan he took out and didn't pay on, surprising him as he never took out the loan!

Other disturbing things came up as well. Apparently the Founder of LifeLock Robert J Maynard's story of starting LifeLock didn't check out either. He was arrested because of HIS own gambling debts not due to identity theft, in fact his own father accused Mr. Maynard of committing Identity theft...on him!

After that story hit in May, Mr Maynard resigned from LifeLock and is no longer involved in the company.

So how did the Identity Theft work out for the current CEO Todd Davis? It did get resolved...the company hired an outside firm to fix it!

Too many warning bells for me. Run Forrest!

Detective Racer X...out :)


Fiscal Musings said...

Interesting info about the company. I wrote about them in the past, but haven't actually signed up for their services. I can't imagine why I would when on their site they tell you that everything they do you can for yourself.

RacerX said...

You get the $1MM insurance policy, as long as they will pay out it is worth something. However locking down your account at the credit bureau is a pretty heavy thing to do, because you will be a bit hamstrung as well.

To your overall point though, i don't see the value.

Kind of funny about the CEO getting tagged though...

Mrs. Micah said...

You can also lock your credit for something like $10-15 ea. right? That's without any kind of fraud suspected. And then another $10-15 ea to open it back up.

So at most you're out $30-45 for locking down and another $30-45 for unlocking....$60-$90 is cheaper if you're that concerned.

Sharon said...

I actually knew all of that. Yes, I know I can put fraud alerts on my accounts. I am on a 30 day trial, so I can cancel at any time. I have not paid a dime yet. I did see a consumer report on it and it is good. Fraud alerts are great if you are not opening up any credit. But, alas, you have me rethinking this decision. I have a week to cancel.

Sharon said...

P.S. I went to consumercompare.org for your info. It rates all of the plans.

RacerX said...

@Mrs M- It is free throughs the credit bureau. The "unlock" portion can be slow BTW. Which isn't always a bad thing :) Just be aware.

@Sharon - Didn't name you because you are great and I didn't want anyone to think I was picking on you.

It was you that got me thinking about the issue and spent a couple hours of research and I kept hearing worse and worse things! Seems like the biggest was handled when they off'ed the CEO.

My only current complaint is how they market, they lead people to believe that they cannot do this otherwise (IMHO).

Apparently they have chapped Experian enough that Experian just filed suit on them on Feb 13th (I believe) for multi-millions in damages.

Not telling to bail. Just a buyer beware!

Thanks for visiting...and extra thanks to Sharon for kicking this off!

Canadian Saver said...

I know that Mary Hunt from Debt-Proof Living recommends LifeLock also...

RacerX said...

I really changed my opinion on that day.

At first I thought that, it wasn't a great value, but you were getting the insurance for the money. But the history of the company, at least to me, scares me off. It will be interesting to see what comes of the Experian lawsuit.

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