For several years, LifeLock has been boasting that it can help protect you from identity theft. And if you do become a victim of identity theft, the company claims it will help you get back your good name. Neither of these claims are true.
In March, LifeLock settled a 35-state Federal Trade Commission lawsuit over its misleading advertising and had to pay $12 million. The FTC ordered LifeLock to stop lying to its customers about its services. The company tried to spin its punishment as a good thing because it puts standards in place to protect consumers. I guess they're hoping customers don't realize that LifeLock is the very company consumers needed protection from.
I started writing about the troubled company back in 2008 for AOL personal finance site WalletPop. My chief complaint about LifeLock was that the "fraud alerts" the company putting on consumerss credit reports weren't all that helpful. And consumers don't need to pay LifeLock a monthly fee for this -- they need only make a simple phone call to each credit reporting agency. More recent services developed by LifeLock seem to provide little value, but have catchy names to draw your attention. Still, these don't seem worth much.
My other beef with LifeLock is that you're very unlikely to get assistance from the company if your identity is stolen. While the company touts its "million-dollar guarantee," a careful reading of the fine print details exclusions that let LifeLock off the hook. It says it'll help you if your identity was stolen because of a defect in their services -- this would let LifeLock wriggle free from helping in just about every instance.
The most convincing piece of evidence about the worthlessness of the LifeLock services came a couple of weeks ago. Back in May 2008, I reported that LifeLock CEO Todd Davis himself had become a victim of identity theft after telling the world his Social Security number in advertisements for the services. The company copped to the fact that there had been one instance of a thief successfully using Davis's data to obtain credit and at least 100 other attempts to do so.
That was only the tip of the iceberg, however. It has now been revealed that Davis has had his identity stolen and used to fraudulently obtain credit at least 13 different times, beginning in 2007. If the company failed -- multiple times -- to protect its own CEO from identity theft, how on earth will they protect their lowly customers?
Seeing LifeLock for What It Is
Davis, however, contends the services work: "Our service worked just the way it was supposed to. I haven't spent any time or money trying to repair my credit."
Sure, LifeLock would do everything to fix things for Davis, seeing as he's the CEO and the company's reputation depends on this being repaired. But if Davis had been a regular LifeLock customer, the fine print of its million-dollar guarantee (with more holes than swiss cheese) would absolve the company of responsibility in repairing his credit.
Here's the best part about my history with LifeLock: When I was writing about them in 2008, I got a call from one of its top executives inviting me to meet with CEO Todd Davis so he could explain their services to me. Because obviously I didn't really understand the services LifeLock provided.
Apparently, I understood all too well. The troubled company can't really stop you from becoming a victim of identity theft. It may reduce your risk level a tiny bit, but not enough to be meaningful -- and certainly not enough to pay for. What better proof is there than the company's CEO becoming an identity-theft victim at least 13 separate times?
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