Sunday, June 22, 2008

Identity theft protection

You have no doubt heard LifeLock's ad on the radio. It's where the CEO of LifeLock says: "My name is Todd Davis. My social security number is xxx-xx-xxxx" (he actually provides his real social security number in this ad, and you can also find it on LifeLock's home page). The point of the ad is that LifeLock protects you from identify theft, and Mr. Davis is so confident of their service that he is quite comfortable publicly sharing his social security number. When I first heard the ad, it definitely piqued my curiousity.

So how does this service work and, more importantly, is it effective? Not surprisingly, there's been a lot of controversy in the news about whether or not it works. Bruce Schneier has a great post on the controversy and how LifeLock works. The controversy really stems from the core of what LifeLock does: they put fraud alerts on your credit reports from the three major credit reporting agencies, forcing lenders to verify your identity before they can issue credit cards in your name. Lenders and the credit reporting agencies hate this (it makes it harder to give credit), and so they've started a smear campaign against LifeLock (thus the controversy). In addition to the fraud alerts, LifeLock apparently does a bunch of other clever things to limit your exposure to identify theft.

So is this a service you should run out and sign up for? Probably note. Schneier notes: "At $120 a year, it's just not worth it." It's unlikely you'll be a victim of identity theft. And even if you are, it has become relatively easy to clean up the mess. Furthermore: "... it's hard to get any data on how effective LifeLock really is."

And the best part is: " can do most of what these companies do yourself." The second link (from the blog at is particularly useful. They provide a series of relatively easy steps you can take to protect yourself from identity theft. One key step is to regularly monitor your credit reports. And here's what they say about doing that for free:

You are entitled to one free credit report per year from each of the three major credit reporting agencies, Experian, TransUnion, and Equifax. You get these reports through Only use this site. Others that sound similar require you to pay.

The important point here is that you should go to for your free credit reports---don't sign up for any other service that's going to charge you for this free service.


Kevin said...

Obviously you have never used The credit report companies don't want to give out free credit reports, but they are compelled by the government, so they make you fax in information, wait for weeks, go to offices in person, et cetera in order to get a free credit report. Plus, it doesn't actually contain all the information that a credit report usually has. If you need to use a credit report for something (like, proving to a landlord in San Francisco that you are a real person) they generally won't even accept the printouts because they don't look like real credit reports.

What you should *really* do is go to, sign up for the "Free" credit report, and cancel immediately. They just make their profit on people forgetting to cancel their "service".

Pandu Nayak said...

It's true that I've never used After I wrote this post I put a little item on my todo list saying "Id theft protection". The idea was to actually follow the suggestions made in those articles. Sadly, that item is still on my todo list...

As for signing up at services that make money because people forget to cancel, I'm afraid I might be amongst those people... Not to mention the junk mail you probably receive from them after you cancel (do you?).

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