You have heard the commercial... Here is my social security number... The guy gives it out and claims no worry about fraud and offers a ONE MILLION DOLLAR GUARANTEE.
This company was created to perform actions that consumers were given as "rights" in the 2004 amendment to the Fair Credit Reporting Act.
You have the right to place a "Fraud Alert" on your file (for three months if not a victim of fraud... For 7 years if you were a victim of fraud) and get a free copy of your report after placing the fraud. Both are free services.
They also opt you out of receiving junk mail based on information gathered from the bureaus (the bureaus have given an 800 number for this for the last ten years... It is a free service).
You may also place a phone number on your file. Lenders who intend to make loans to "you" must call that number before making a loan. (also free).
Now there is nothing wrong with charging people to provide a source to complete actions that the consumer may complete free of charge... What is dangerous is making it sound as if you just locked your identity in a break proof safe. This simply isn't the case.
As a credit bureau representative I presented the new amendments to my customers in seminars. We cautioned them that the Federal Trade Commission (which monitors and regulates companies under the Fair Credit Reporting Act) had no idea how they were going to provide the man-power to monitor the requirements of companies calling this number before making a loan. If you call your state's attorney general's office today and ask them about this policy they will send you to the FTC website where the FTC will give you a pamphlet on "how to dispute items on your bureaus"..in other words... Neither entity has any idea. The actual policies for this action (in conjunction with state's attorney general offices and banking and credit union authorities) have yet to be formulated.
So how then can Life Lock give a ONE MILLION DOLLAR GUARANTEE... I read it... It says
A. If you are our member when someone accesses your personal identifying information and subsequently uses it without your authorization to commit a fraud, due to a failure or defect in our Service, and you have complied with this Agreement, subject to the terms herein, we will pay professionals to assist in restoring any such loss or recover such expenses, as required, provided however that the maximum limit of our Service Guarantee is $1 (one) million per lifetime for all incidents in the aggregate.
FAILURE OR DEFECT IN OUR SERVICE... So if they place the phone number on your file and the lender simply misses it, ignores it... Or gets a busy signal and moves on... And the $10k credit card is issued fraudulantly, LifeLock is not liable because their system and service actually put the number on your file.
Again... If you think of this service as providing a source for you to update your credit file with information... Fine... Their fees do not seem outrageous (except I can't imagine why you need to pay monthly if you file a 7 year fraud alert)... But if you think you are covered up to 1 million against fraud... Better keep a reserve back.
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