Sunday, January 3, 2016

Protecting Your Identity - Before and After the Fact

Five years ago, while sitting on a beach on Kiawah Island with my sister, our kids, and her kid, my wife had her car keys stolen.  The thief took the keys and went back to the parking lot to claim my wife's purse, which contained her driver's license, various credit cards, and social security cards for her and our two children.  When my wife finally realized several hours later what had happened, there was very little that could be done about it.  She called me and explained the situation. I did my best to try and calm her down and told her I would be there as soon as I could with the spare key.  On the three hour drive there I thought a lot about what had happened and what steps needed to be taken as a result.  I addressed the physical safety issues while I was there.  Then, after I returned home, I started on the financial issues.

First, I reported all the credit cards in my wife's purse stolen and had them cancelled.  Then I moved on to the bigger issue.  I knew that the thief, having gained possession of various forms of official identification, had enough ammunition to open charge accounts in the names of my wife and kids.  So I went on line and tried to "freeze" all three of their credit files.  Each of the three major reporting agencies, TransUnion, Equifax, and Experian, allowed me to freeze my wife's file, but none of them would let me do the same with my children's accounts.  I never got a good explanation for why at the time. (Note as of October of last year, at least Equifax allows the freezing of a child's credit by a parent.  The hope is that the other agencies will follow suit).

If you're familiar with the concept of a credit freeze, you already know that it is the most drastic measure taken to protect your identity.  The concept is pretty simple.  Once you implement the freeze, which should be done with all three agencies if you decide on that course of action, no new credit can be opened in your name without first "thawing" your file, which would require the proper credentials, including the PIN number issued at the time of the freeze. Should you need to apply for credit, you can unthaw (either permanently or temporarily) your file.  Ideally, you would ask the creditor which reporting agency they used and unthaw only that file while the application was being processed.

Less drastic is the fraud alert, which allows you to request notification any time an application for credit is taken out in your name.  This method isn't foolproof by any means though as an enterprising criminal might have a contingency plan in place to overcome those hurdles.

Again, I opted for the freeze in my wife's and kids case.  It seems to have worked out so far.

Several years later, after having read about a rash of mass identity thefts, I signed up for Life Lock, which is a credit monitoring service.  For $10 a month, they monitor your credit file and report any suspicious activity to you.  Their service comes with a guarantee that the company will spend up to a million dollars helping you clean up the mess if your identity is stolen after using their service.  Is it worth it?  To me it is, but there are cheaper alternatives.  See the article below from for a pretty thorough review of Life Lock:

A Lifelock Review:

You probably have heard of LifeLock. Way back in 2008, I reviewed LifeLock for the first time. The service has changed quite a bit since then and I have revised this review as recently as January, 2016.
Before signing up for LifeLock (that link offers 10% off and 30 days free), you must realize what you’re paying for. There are plenty of solid ways to protect yourself from identity theft that are absolutely, 100% free and legit. In many ways these free identity protection measures go above and beyond the paid services, such as Lifelock, that are out there. Let’s take a look at what Lifelock will do for you (for $9.99 per month for its “Standard” plan, with pricier higher service “Advantage” and “Ultimate Plus” plans also available), and whether you can achieve the same results for free on your own.
Lifelock Review

Benefit Claim: Identity Threat Detection and Alerts

LifeLock uses advanced technology to constantly monitor over a trillion data points to help detect suspicious uses of your identity information to get loans, credit and services in your name. At the center of all LifeLock services is the patented LifeLock Identity Alert® system. We will send you a potential fraud alert by text, phone or email. If you confirm that the suspicious transaction is fraudulent, your LifeLock team is on it.
Free DIY Alternative? Yes. You can go to any of the three credit bureaus and request fraud alerts of varying lengths. You only have to do this with one bureau and they will notify the rest. Here’s the link to Experian’s fraud alert. Also, Credit Karma now offers free credit monitoring.

Benefit Claim: Reduced Pre-Approved Credit Card Offers

Pre-approved credit card offers can provide important information to identity thieves. LifeLock will request your name be removed from many pre-approved credit card mailing lists.
Free DIY Alternative? Yes. In this case, you can do this for free at the official website created by the credit bureaus to opt out at

Benefit Claim: Credit Reports and Credit Score Access

The “Advantage” (1 credit bureau) and “Ultimate Plus” (3 credit bureaus) plans offer:
Secure online access to your annual credit report from a major credit bureau so you can see details of your credit history.
Online access to your annual credit score from a major credit bureau. Includes top factors used to determine your score so you’ll better understand how lenders evaluate your credit worthiness.
Free DIY Alternative? Yes. You can do this on your own for free at and Credit Karma. See my post on how to take advantage of this – ‘Smart Planning will get you 3 Free Credit Reports Per Year’. More recently, Credit Karma began offering free access to TransUnion credit reports, at any time.

Benefit Claim: Black Market Website Surveillance

Identity thieves sell personal information on black market websites around the world. LifeLock patrols over 10,000 criminal websites and notifies you if we find your data.
Free DIY Alternative? No. I don’t know that there is a free alternative to this benefit. I do know that credit monitoring services will alert you if your information is improperly used (or attempted to be used) and maybe that is enough. I suppose it would also be helpful to know proactively if your information is out there. If it is out there, however, you have to think that it will be used prior to LifeLock finding out it is out there and notifying you.

Benefit Claim: Lost Wallet Protection

A lost wallet can mean a lost identity. Call us if your wallet is lost or stolen and we’ll help cancel or replace credit cards, driver’s licenses, Social Security cards, insurance cards and more.
Free DIY Alternative? Yes and no. These all seem like things you can do on your own with a few phone calls (this would be a good time to recommend that you keep a list of everything in your wallet, along with service phone numbers). The benefit summary does say that LifeLock will cover “Up to $2,000 per Stolen Identity Event” in document replacement costs – which could be a nice benefit.

Benefit Claim: The famous “$1 Million Total Service Guarantee”

If you become a victim of identity theft while a LifeLock member, we’ll spend up to $1 million to hire the necessary lawyers, accountants and investigators to help your recovery.
The finer print is here.
LifeLock also claims, that as part of their coverage, you will be reimbursed for certain out-of-pocket costs and expenses in the following categories:
  1. Cost of Replacing Documents.
  2. Traveling Expenses.
  3. Loss of Income.
  4. Stolen Handbag, Purse, or Wallet.
  5. Childcare and /Elderly Care.
  6. Travel Assistance.
  7. Fraudulent Withdrawals.
Free DIY Alternative? No. It’s hard to determine how much this is all worth and whether you actually need it or not. If this gives you some peace of mind, then it might be worth the cost.

LifeLock Summary:

The bottom line is that Lifelock is not a scam, it’s just that you can do some of what they do for free, with effort and discipline (to keep doing it periodically). Lifelock seems worth it if you have the attitude “well, I could do this stuff for free, but I don’t want the hassle, and I’ll probably forget, so I’ll just let someone else handle it for a small price”. You’re basically paying for peace of mind and to set it and forget it plus some other benefits you can’t get elsewhere. If you find it’s not worth the fee, you can always cancel! If you’re interested in Lifelock you might as well get a free trial and discount on the subscription price – you can get 30 days free and 10% off membership here (discount shows up when you go to cart).

Count me among the people who would just as soon have Life Lock do all the work.  If you're not one of those people, but still want the peace of mind, the article above provides you with pretty much everything you need to know to effectively do it yourself.


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