Identity Theft – Should you or LifeLock guard against it?

My social security number is 457-55-5462. Wait, that’s actually Todd Davis’ social security number. Mr. Davis, CEO of LifeLock, has challenged every ill-intentioned malcontent to try to steal his identity. He is so sure that LifeLock can and will prevent identity theft that he shouts his social security number every chance he has. At $10 a month, is LifeLock something you should consider?

We have all heard the reports that identity theft is a common and growing problem in America. So what does LifeLock do exactly?

1. Set free fraud alerts with credit bureaus if you suspect your identity has been stolen
2. LifeLock will continue to set fraud alerts every 90 days unless you tell them otherwise
3. Remove your name from lists of pre-approved offers for credit cards and insurance
4. Order your free credit report annually for you
5. Using WalletLock, they will contact all of your credit/debit card companies if your wallet is stolen
6. Using eRecon and TrueAddress, LifeLock monitors criminal websites and nationwide databases for your personal information
7. If your identity is stolen, you are covered by a $1 million service guarantee

LifeLock readily admits that several of the services that it offers are free to the public, but recommends using a professional to manage it for you. So what can you do for yourself?

1. You can set a fraud alert with each of the three major credit bureaus for free. Call 1-888-397-3742 for Experian, 1-800-680-7289 for Transunion, and 1-800-525-6285 for Equifax).
2. You can reset your fraud alert every 90 days following the same links above.
3. Use OptOutPreScreen.com to remove your information from pre-approved lists. Use DoNotCall.gov to remove your phone numbers from telemarketers call lists (something LifeLock does not do).
4. Every consumer should visit AnnualCreditReport.com each year for a free credit report from Experian, Transunion, and Equifax (make sure to bookmark). I also recommend paying the $7-8 to see your FICO score (just make sure it’s the FICO score you are seeing). Another option is Wells Fargo Identity Theft Protection provided by Trilegiant which offers three credit reports, three credit scores, an analysis of your reports/scores, daily monitoring, and $10,000 identity theft insurance. After a 30 day free trial period, the monthly fee is $12.99. You can cancel during the 30 day trial and still receive the reports, scores, and analysis. You can also sign-up and cancel as many times as you want. Just call 1-888-877-1605 or visit Wells Fargo for more information.
5. If you lose your wallet or purse, then IdentityTheftLabs gives step-by-step instructions on how to minimize victimization.
6. If you are already paying for credit monitoring through companies such as Equifax, then you can often have them monitor criminal websites for your personal information free of charge.
7. Many credit card companies offer a credit protection plan for a fee that includes identity theft coverage. For example, one of my cards offers a Debt Protection Plan for a fee of $0.55 per $100 that I spend each cycle (we usually pay $4-7 each month). If I am a victim of fraud, then I am assigned a dedicated agent that helps me through the resolution process. And the identity theft does not have to be related to that account. I can also order a free credit report twice a year. So we don’t quite have $1 million coverage, but we do have some protection as well as other benefits in case I lose my job or have a baby.

So as you can see, much of what LifeLock does you can do for yourself. LifeLock, however, offers automation, simplicity, and an undeniably large guarantee. Whether you decide to use an identity theft protection service or handle everything yourself, simply remember that you are ultimately responsible and in charge of your own identity. Make sure to use good common sense and you can avoid many prevalent pitfalls. If you are looking to compare popular identity theft protection services, then visit the IdProtectionGuide.

(This post was featured in Carnival of Pecuniary Delights Edition #20 hosted by Counting My Pennies)