March 2008
LifeLock’s ads are bold, its protection less so
The TV ad depicts the financial equivalent of touching a hot stove: A man drives on busy downtown streets with his Social
Security number plastered on a mobile billboard. "I’m Todd Davis, and I’m here to prove just how safe your identity can be
with LifeLock," says the company founder and CEO. "That’s my real Social Security number."
LifeLock spent $5 million on TV and radio ads nationally in the first half of this year and claims to have 300,000 subscribers. It has been endorsed by actor Fred Thompson (before he officially became a presidential candidate) and radio personalities Rush Limbaugh, Sean Hannity, and Paul Harvey. But as Harvey might say, now here’s the rest of the story.
The real deal
What does LifeLock do to secure your identity? For $10 a month or $110 a year, LifeLock instructs the top three credit-reporting agencies—Equifax, Experian, and TransUnion—to place fraud alerts on your credit reports and renews them every 90 days. The service also tells the three bureaus that you opt out of receiving preapproved credit offers and asks the Direct Marketing Association (DMA) to remove your name from mailing lists. Of course, you can do those things yourself free. And fraud alerts are no guarantee against ID theft. Some lenders don’t see them and allow crooks to open accounts in other people’s names anyway.
"We know this isn’t 100 percent bulletproof," Davis told us. "You can still be a victim. If that happens, we’re there to clean up the mess." Davis says that the company guarantees against all losses and expenses a client incurs up to $1 million. LifeLock’s guarantee will restore stolen funds to your bank accounts, get fraudulent credit accounts closed, pay lost wages, hire credit-repair firms, and do "whatever it takes to get your life back," Davis says.
But the customer agreement doesn't actually bind LifeLock to much of what Davis promised us. It specifically says that the company will not reimburse "consequential damages, such as lost wages." Davis says customers should ignore the fine print: "The lost-wage clause is there because insurance commissioners wanted to be sure we’re not an insurance company. We’re not." The contract, meanwhile, is vague about reimbursing stolen money: "We will pay professionals to assist in restoring any such loss." The guarantee hinges on "the failure or defect in our service," which the contract defines as initiating requests with credit bureaus and the DMA. But Davis says the contract really means something else: "If the fraud alerts did not do what they were intended to do, then the service failed. I don’t just mean that my system didn’t send them correctly," he says.
The bottom line
LifeLock’s claims and Davis’ reckless display of his Social Security number—which the contract considers a breach if you do it and which did result in a theft of his identity—seem to overstate the security provided. Davis disagrees. "I’m being bold and disruptive to get people’s attention," he says. "It’s not 100 percent safe. However, if you have our service and your ID gets stolen, I’m going to help you."
LifeLock spent $5 million on TV and radio ads nationally in the first half of this year and claims to have 300,000 subscribers. It has been endorsed by actor Fred Thompson (before he officially became a presidential candidate) and radio personalities Rush Limbaugh, Sean Hannity, and Paul Harvey. But as Harvey might say, now here’s the rest of the story.
The real deal
What does LifeLock do to secure your identity? For $10 a month or $110 a year, LifeLock instructs the top three credit-reporting agencies—Equifax, Experian, and TransUnion—to place fraud alerts on your credit reports and renews them every 90 days. The service also tells the three bureaus that you opt out of receiving preapproved credit offers and asks the Direct Marketing Association (DMA) to remove your name from mailing lists. Of course, you can do those things yourself free. And fraud alerts are no guarantee against ID theft. Some lenders don’t see them and allow crooks to open accounts in other people’s names anyway.
"We know this isn’t 100 percent bulletproof," Davis told us. "You can still be a victim. If that happens, we’re there to clean up the mess." Davis says that the company guarantees against all losses and expenses a client incurs up to $1 million. LifeLock’s guarantee will restore stolen funds to your bank accounts, get fraudulent credit accounts closed, pay lost wages, hire credit-repair firms, and do "whatever it takes to get your life back," Davis says.
But the customer agreement doesn't actually bind LifeLock to much of what Davis promised us. It specifically says that the company will not reimburse "consequential damages, such as lost wages." Davis says customers should ignore the fine print: "The lost-wage clause is there because insurance commissioners wanted to be sure we’re not an insurance company. We’re not." The contract, meanwhile, is vague about reimbursing stolen money: "We will pay professionals to assist in restoring any such loss." The guarantee hinges on "the failure or defect in our service," which the contract defines as initiating requests with credit bureaus and the DMA. But Davis says the contract really means something else: "If the fraud alerts did not do what they were intended to do, then the service failed. I don’t just mean that my system didn’t send them correctly," he says.
The bottom line
LifeLock’s claims and Davis’ reckless display of his Social Security number—which the contract considers a breach if you do it and which did result in a theft of his identity—seem to overstate the security provided. Davis disagrees. "I’m being bold and disruptive to get people’s attention," he says. "It’s not 100 percent safe. However, if you have our service and your ID gets stolen, I’m going to help you."
This article was also published in Consumer Reports Money Adviser.
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