None of your business! C'mon, did you really think I'd expose my financial privates to the world?
If it's financial exhibitionism you're after, check out Todd Davis (457-55-5462), the CEO of LifeLock. For two years, he's plastered his Social Security number in newspapers, on TV and radio, and on billboards, semis, and anywhere else ad space is sold. (Seriously, it's 457-55-5462.)
By boldly egging on ne'er-do-wells to try to steal his identity, Davis has illustrated the effectiveness of his company's identity protection services.
The stunt worked -- though I'll venture to guess not exactly how LifeLock's marketing department hoped it would.
Davis' bragging rights and identity were indeed swiped last year in Texas, when a man got a $500 loan from a check-cashing operation by using Davis' name and Social Security number. The Texas holdup, it turns out, was just one of nearly 90 attempts on Davis' identity, according to an interview the CEO gave The Associated Press.
The breach is back in the news because of fresh lawsuits filed against LifeLock by customers in Maryland, New Jersey, and West Virginia. They're claiming false advertising because they, too, had their financial privates manhandled by perfect strangers while under the company's watch.
Shocker? Not really. As the marketing stunt proves, there's only so much such companies can do to shield your unmentionables from prying eyes.
Your credit watchdog is taking a nap
Don't believe me? Then perhaps I can interest you in my branded identity protection service (can of Mace and bee suit included!).
I certainly wouldn't be hurting for customers, thanks to high-profile security breaches at the likes of TJ Maxx
There's clearly profit to be had in the privacy protection market -- much-needed profit for credit reporting-related services. The 2003 passage of the Fair and Accurate Credit Transactions Act (FACT Act) handicapped one of their revenue streams by mandating free credit reports for all. (Get yours at annualcreditreport.com.)
To help make up for the financial shortfall, the credit reporting companies created a new revenue stream: credit watch products. Seeing profit in consumer fear, other companies soon created their own credit watch muscle for hire. One of LifeLock's investors is the respected venture capital firm Kleiner Perkins Caufield & Byers -- a company that's had the wherewithal to find many future big brands in their infancy. Perhaps you've heard of Intuit, Amazon
Profiting from consumer fear
Despite the big guns behind such services, my advice for consumers is this: Save your money and skip the credit watch subscription services. Here's why:
1. They give you a false sense of security: Sure, they're regularly checking for activity in your credit files. But at best, they're like a delayed burglar alarm, telling you after the fact that someone grabbed the silver candlesticks and hawked them at the local pawn shop. Even when they spot suspicious activity, the damage is likely already done since it can take up to 30 days for a newly opened account to show up on your credit report.
2. There are plenty of cracks for the crooks to sneak through: LifeLock, like many fraud prevention services, puts a fraud alert on the consumer's credit file. The fraud alert requires any lender or other service running a credit check on you (or the supposed "you") to contact the real you for verification. Davis had fraud alerts on his Equifax, TransUnion, and Experian credit files. But those weren't the companies the payday lender used to run a credit check on the Texas perp. (Yes, there are many other credit reporting bureaus you've never heard of.)
3. Getting the protector to pay up on the promised insurance is harder than getting an eyebrow lift covered by an HMO: Recovering from identity theft is costly and time-consuming: The average victim spends at least $400 out of pocket and at least 40 hours dealing with administrative hassles, which makes the ID theft insurance that many watch products offer a very attractive add-on. Getting up to $1 million in losses covered sounds like a sweet deal. Good luck getting one dime. As you might imagine, there are loopholes upon triple-knotted loopholes to prove that the fraud is due to a shortcoming by the ID protection company.
4. You can easily do for free what they charge you to do: Almost every service these companies offer, you can do yourself for free. For example:
- Put a fraud alert on your file. Contact one of the three major bureaus and it will alert the others to put a lock on your file. (Though you have to believe that you already are or are in danger of being a victim of credit fraud.)
- Renew it every 90 days. Put a note on your calendar to call the credit bureau again.
- Remove your name from junk-mail lists and get rid of those preapproved credit card offers. See our step-by-step guide for doing that in less than 30 minutes.
- Order free credit reports. You can do it yourself three times a year by going to annualcreditreport.com.
- Contact your credit card companies if your wallet is stolen. Take a moment after you're done reading this article to photocopy the contents of your wallet (front and back of cards) and put the copies in a safe place so you have the phone numbers handy if a pickpocket strikes.
Be your own credit cop
Here are some other cost-free ways to keep tabs on your financial privacy. (For more in-depth advice see the links at the end of this article.)
1. Inspect your credit reports for unauthorized funny business. Do this for free at annualcreditreport.com, and mark your calendar to pull your credit report from one of the other providers every quarter or so.
2. Patrol your account activity. Don't wait for snail-mail account statements. Go online a few times a month to track account activity. Unusual charges are usually the first place unauthorized activity will show up.
3. Don't assume anything was lost in the mail. Call your credit card company or bank if an account statement is late. A missing bill may mean that some meanie called the company using your name, and changed the billing address to prevent you from catching their shopping spree.
4. Put a guard dog on your mailbox, particularly when tax forms, annual statements, and bills arrive. A shocking number of thieves troll mailboxes for your personal information.
5. Cloak your credit card number when you shop online. Many credit card companies, such as Citibank
All right, all right ... if you must hire some muscle
That said, for those at risk (if you've had data compromised, are going through a nasty separation of assets, or have already been a victim of fraud), hiring a privacy patrolman might be worthwhile. Look for one that scours at least the three major credit bureaus in real-time and provides alerts about any unusual account activity. Also use one that watches for changes in public records -- applications or address changes in your name or using your Social Security number.
These products are only for those who are at risk for fraud. For everyone else: Save your money ($59.40 to $141.86 a year) and deputize yourself.
More ways to keep the bad guys from stealing your identity: