In a world where identity theft seems pandemic, spending $10, $20, or $30 a month might seem like good insurance against the nightmare that is identity theft.
However, like with most products, it’s important to know exactly what you’re buying. Even more importantly, you need to be aware of the fine print. The last thing you want to do is pay to feel safe only to find out your service has let you down.
What Is LifeLock?
LifeLock is a credit protection agency that offers identity theft related services. Their company boasts that it will:
- Scan a trillion data points a day for threats
- Alert you to credit bureau inquiries
- Spend up to $1 million dollars with Identity Restoration Specialists should your identity be compromised.
I want to break down LifeLock’s main features and explain why they are important (and why some, you can live without). The review will also include my personal experience helping a 90 year-old relative deal with LifeLock after she lost her wallet.
LifeLock’s Main Features
LifeLock boasts a number of services to its customers, all geared toward protecting you, your identity, and your credit.
Credit Report Monitoring
Like other credit monitoring services, LifeLock will alert you to credit inquiries from the 3 credit major bureaus. However, this is only on their most expensive $30/month plan!
If someone (other than you) applies for a car loan in your name, a notification is certainly valuable. However, if you subscribe to the $10 or $20 a month plan — which only consults with one credit bureau — there is the risk of a fraudulent transaction slipping through.
This defeats the entire purpose of monitoring your credit.
Rather than being notified AFTER a cyber crook used your credit report to obtain credit, I’d prefer to block the request in the first place. The single most important thing you can do to prevent this is to lock down your credit files with a Security Freeze.
Dark Web Surveillance
An interesting, and more unique-sounding, feature is “black market” website surveillance.
It turns out there are huge underground networks where cyber criminals buy and sell stolen personal information. This information might include your name, birthdate, social security number, website user IDs, and passwords.
At face value, being notified if your information is found on black market databases sounds great. Upon further reflection, though, it might not be as actionable as you think.
For example, what would you do if your social security number is out there on the “dark web?” Would you change it? Probably not. You might be advised to apply a security freeze to your credit files. Of course, this is something you should do even if your information wasn’t found on the dark web.
Likewise, what if LifeLock alerts you that your email address or date of birth was found in a dark web criminal database? There’s really not a lot that you will (or can) do with that information.
A practical and free suggestion to minimize your vulnerability is to not use the same password on multiple websites… especially financial sites.
Learn More: LifeLock vs Identity Guard
Lost Wallet “Protection”
Lifelock offers what they call “lost wallet protection.” However, upon further investigation, it’s not really protection at all. In fact, they really can’t do much more than advise you to cancel your credit cards and order new identification.
Despite claims made by their sales department when I called to research this article, I found their lost wallet service to be mostly useless. When I grilled the sales rep, it quickly became apparent that LifeLock cannot order replacement cards on your behalf. There is no power-of-attorney relationship between you and LifeLock. Ultimately, it really is your responsibility to deal with everything.
Address Change Verification
This feature aims to alert you if a cyber criminal changes your address at your financial institution.
In case you’re wondering how this magic happens, here’s a rundown. First, you must provide your banking user IDs and passwords to LifeLock. This way, they can alert you to an address change in case your financial institution doesn’t.
For me, this is a deal killer… and a really dumb idea.
Resource: 6 Keys to Setting Financial Priorities
Credit Card, Checking And Savings Account Activity Alerts
Simply provide LifeLock with the user IDs and passwords for all your financial accounts. Then, you can view transactions at LifeLock.com instead of at your bank’s website (or in your inbox, if you set up transaction alert).
Again: I think giving LifeLock — or any other company — all of your financial user IDs and passwords seems like a terrible idea!
Reimbursement for Stolen Funds
Depending on the plan, LifeLock offers between $25,000 to $1,000,000 in reimbursement for stolen funds.
When reading the fine print, though, you’ll see that this coverage is secondary to other coverage that might be offered by the financial institution. It’s not quite as good as it sounds.
For example, your brokerage account most likely already has $500,000 coverage for fraudulent transactions through SIPC. And remember, you are not usually liable for fraudulent credit card transactions.
Alerts for Crimes Committed in Your Name
This sounds useful but I’m not sure how necessary it is. I don’t foresee someone creating a fake driver’s license — with my information, but their picture — and giving that to the cops if arrested.
However, if that happened, having identity restoration experts working on your behalf does sound helpful. You’ll need to weigh the value of this service for yourself.
Data Breach Notifications
You may have thought that LifeLock would notify you if any entity with which you have a financial relationship suffers a data breach. But you would be wrong.
This generic feature means you are simply added to a security mailing list. So you get an email whenever a breach occurs at any company, whether or not you do business with that company.
Again: from a practical standpoint, what would you do with that information? Other than applying a Security Freeze to your account, something you should do anyway, the answer is probably nothing.
Court Records Scanning
The medium- and high-rate plans will “check court records for matches of your name and date of birth to criminal activity.” This sounds like a good feature, but plays on your fears.
After all, no one wants to be pulled over for speeding, only to find they have arrest warrants out in their name. But is this unlikely possibility worth an extra $10-$20 a month?
Is LifeLock Better Than Simple Credit Monitoring?
If you were inclined to pay $25/month for basic credit monitoring from a company like Experian, for example, then I’d say yes. Companies such as LifeLock offer many additional features for about the same price. But if you have a cheaper credit monitoring option, it may not be worth the extra spend.
Some Things You Can Do for Free
If you are not inclined to pay hundreds of dollars per year, you can do some things yourself for free.
- As previously mentioned, secure your credit files with a Security Freeze.
- Get your free annual credit report from the official, government-approved website, annualcreditreport.com. Hint: Don’t simply Google “free annual credit report,” or similar. You’ll be confronted with a number of look-a-like sites trying to upsell you a variety of products and services.
- Consider setting up transaction alerts for all your financial accounts (bank accounts, brokerage accounts, credit cards).
As a personal note, I was initially reluctant to do this last step because I already get too many emails. However, I’ve grown to appreciate the email confirmation each time I buy groceries or transfer between accounts. I feel more in touch with my money.
Here’s an example of how transactions alerts can be very helpful:
A friend of mine recently had her PC compromised by keystroke-logging malware. Cyber criminals got her Wells Fargo online banking credentials and logged in to her account. They took a $50,000 cash advance against her home’s equity line of credit, which was placed in her checking account. Then, they wire transferred the $50,000 from her checking into their own account.
Had she set up transaction alert emails on all her accounts, this crime would have been thwarted from the first step.
A Real World LifeLock Experience
Part of my A few months ago, a 90 year-old relative of mine lost her wallet. Since she was a LifeLock member, she immediately called them expecting assistance.
Her experience was subpar. She waited on hold for over an hour. When she finally got through, she was told a resolution specialist would call her tomorrow. When she didn’t get the call, she called back. After another very lengthy hold, she was told someone would call her back later that day. When that didn’t happen, she called back and cancelled the service.
Fortunately, she didn’t wait for LifeLock to take action. She cancelled her credit cards, and I assisted in getting her replacement IDs. I set her up with a security freeze on her credit files, something that the first line LifeLock rep didn’t suggest.
Knowing which cards were in the wallet was a snap. I had previously taken a photo (front & back) of every card she carried, just in case she lost her wallet. This came in real handy when it was time to report them missing.
Luckily, she had someone (me) to help her with all of these steps. For all we knew, her wallet was in bad hands, and her accounts could have been compromised. Some folks, though — especially those in the older generations — may not have someone nearby to assist them.
Make sure that the company you’re paying a monthly fee to will be there when you need them!
Lifelock’s Troubled History
According to Consumer Affairs, in 2010, LifeLock issued refund checks to 1 million of its customers as part of a settlement the Federal Trade Commission. The FTC charged LifeLock with making deceptive claims about its identity theft protection service and for allegedly misleading advertising practices. Then, in 2015, it was forced to pay a $100 million fine for violating that 2010 order.
While they have since made changes to their company policies and brought in new management, some customers are once bitten, twice shy when it comes to the service. I am one of those.
When I called the LifeLock sales line to prepare for this review, I asked many very specific and probing questions about their service. Amusingly, when I asked if there is a power-of-attorney relationship between the customer and LifeLock, the sales rep awkwardly paused to read a legal disclosure and directed me to their site’s legal page. It was more of a non-answer than anything.
When I inquired about the size of their “vast network” of financial institutions, I was told they don’t have an exact number because it increases every month. I said, “Ok, I understand. How many was it last month?” I was told that information is proprietary and a secret.
I was then told not to worry. If my identity was stolen because my bank isn’t in their network, LifeLock has my back. They’ll take care of it.
After that 40-minute call — in which I got a lot of sales double-speak and somewhat misleading claims — I was exhausted. I didn’t feel like many of my questions were truly answered, and I didn’t feel much more confident in the service than I was before the call.
So is LifeLock worth it? If I were inclined to spend hundreds of dollars each year for ID theft services, I’d have a number of companies to choose from. Based on its troubled history and my personal experiences with them, I would probably pick a company other than LifeLock. You may have a different impression.
Either way, though, I urge you to always read the company policies and call before signing up to ask as many questions as you can.
There are plenty of loopholes that can get easily hidden in the fine print. You don’t want to be on the receiving end of that while also trying to deal with an unfortunate identity theft situation.
For me personally, I decided to apply a security freeze on my credit bureau files. I’ve also set up free transaction alerts for all my financial accounts, so I keep a daily eye on my money, just through my email. Between those, I am going to rest easy and hope for the best.
How are you protecting yourself from identity theft? Have you been happy with your services thus far?