SHOULD YOU FORK OUT $120 YEARLY TO PROTECT YOUR IDENTITY?

Is it necessary to pay a company for the protection of your identity? The general consensus is an overwhelming NO. Todd Davis, CEO of Lifelock, of course, does not agree with this. Neither do the almost 1 million customers of Davis’ company who pay $10.00 ever month for Lifelock to continually place fraud reports in their name for all three of the credit bureaus. The key here is the word, “necessary,” because this is something the individual can do in minutes, and for free. Are those of you who are customers feeling somewhat contrite right now, or still just lazy like most of us.

It still amazes me how today’s consumer, apathetic over the identity crisis, can rush to judgment on unproven services like this simply as a matter of convenience. I would venture a guess that most Lifelock customers don’t even know the specifics of their coverage, particularly what it doesn’t cover. A West Virginia law firm filed a class-action suit against Lifelock in 2008 charging their “…multi-million-dollar advertising campaign provided false and misleading information about the limited level of identity protection the company provides, and failed to warn them about the potential adverse impact the company's services could have on their credit profiles.”

This particular post was suggested by a reader’s comment which stated that, “Identity theft is the most dangerous scam out there.” I agree. He or she goes on to say the fraud has affected credit scores. It has. The comment closes by saying that ID theft protection is “very necessary.” My first thought was this is a sales pitch for a Lifelock clone, because the “from” line said True Credit, so I checked them out. It turned out to be another service offering credit reports and scores of the three credit bureaus for $14.95 monthly, this one run by TransUnion. I do believe these services can be valuable in keeping consumers up to date on their identity status, but I prefer the program offered by Equifax.

ConsumerAffairs is asking the question on MSN MoneyCentral: “Identity protection: Worth paying for?” And in the first sentence of this article, they quote other consumer advocates saying that Lifelock’s “…customers are wasting their money while the company’s founder insists it is the best way for consumers to protect themselves.” Todd Davis, Lifelock CEO, publishes his Social Security number to prove his point, and admits to 87 attempts to compromise his identity. However, he adds that only one succeeded in monetary success; $500 in a fraudulent loan.

In checking Lifelock’s record of complaints, ConsumerAffairs shows 6 complaints, the Better Business Bureau of Arizona gives it an “A” rating, receiving 39 complaints, all resolved, and the Ripoff Report 22 complaints. Based on this documentation of Lifelock’s customer service, the company appears to be upstanding with its subscribers.

But customer service is not the issue here. It is not a question of whether or not Lifelock’s service—or any other of these companies for that matter—is a necessity for consumers to protect their identity. The overwhelming consensus is still NO.

More on this subject next post.