LifeLock or Trusted ID: Which Is Best?

Identity Theft Is Top Consumer Complaint

According to the latest 2011 Federal Trade Commission (FTC) report on consumer complaints, identity theft remained the top consumer complaint in 2010. The FTC received 250,854 complaints on identity theft, accounting for 19% of the total 1.3 million consumer complaints last year. This puts identity theft at the top of the list of consumer complaints for the 11th consecutive year.

According to the FTC, the most common form of identity theft was through fraudulent government documents, wherein someone steals a person's identity to obtain federal benefits such as welfare and unemployment aid. Credit card fraud came in second followed by phone and utilities fraud. With information increasingly becoming digital, thieves nowadays are using more sophisticated schemes to to steal personal information or con people to willingly turn over information.

According to Consumer Federation of America consumer-protection director, Susan Grant, identity theft continues to remain a big problem. "With more and more personal information about consumers being collected by more and more companies, government agencies and others for various purposes, the fact remains that there are still problems with security breaches, where consumers' information is stolen by identity thieves."

A lot of people are aware that identity theft is a growing concern. However, people still seem to brush it off thinking that they will never be an identity theft victim. 

Have You Ever Heard of Dave Crouse?

I stumbled upon the story of Dave Crouse as I was doing my research on identity theft. Fifty-six year old Dave once had a $180,000 a year construction-industry job. However, he got laid off sometime at the onset of the economic downturn. Adding insult to injury, in 2009 Dave became a victim of identity theft. But his case was not one of those minor identity theft cases. In fact, identity theft and fraud ruined Dave Crouse's life. Identity theft ruined him financially and emotionally.

What started as petty fraudulent charges of $17.98 or $37 in February 2009 eventually became uncontrollable. Within six months, identity fraud cost Dave some $900,000 worth of merchandise, gambling and telephone-service charges. All of these were siphoned out of his debit card.

Dave's once strong 780 credit score has also been ruined. Despite efforts to save his good name, which has cost him $100,000 (practically depleting his savings and retirement accounts), Dave says that his identity (Social Security number, address, phone numbers, and historical information) are still being used in attempts to open credit cards and bank accounts. (If you want to read more about  Dave Crouse's story, click here).

The situation that Dave helplessly found himself in is one that I would never want myself or my family to experience. As you very well know, it takes years to build our good financial standing. We certainly do not want something that took us our whole life to build to be somewhat unprotected and ruined by fraudsters just like that.

Reactive Versus Proactive Identity Theft Service

Just as we protect our home, our car, our family's health, and our life with insurance, it makes logical sense that we also should protect our hard-earned financial standing and reputation. Some people simply wait for something bad to happen before taking action. 

As far as I know, credit monitoring services only alert you after someone has already stolen your identity. Although credit report monitoring is a good measure to spot fraudulent activity, it is not preventative.

Identity theft protection services, on the other hand, try to prevent thieves from stealing and using your information. Based on what I've seen and based on my conversations with some of my friends, there are two leading industry identity theft protection services in the market today worth checking. These are LifeLock and TrustedID.

Based on what I have seen, there are just some very subtle differences between the service offerings that these two top identity theft protection services have to offer. But basically, they both provide the following services.

» Credit Report Monitoring. Both services monitor the three major credit reporting agencies: Equifax, TransUnion, and Experian.

» Daily Monitoring and Alerts. LifeLock and TrustedID both monitor daily and alert you about any fraudulent activity within a day. This is in contrast to the quarterly reports that you get from most credit monitoring services. By the time you see any fraudulent activity, it may already be way too late to take action

» Automatic Fraud Alert. Both services place fraud alerts on your credit file once it has been determined that fraud activity had just occurred. This feature notifies lenders that they should take steps to verify your identity before authorizing new or additional credit.

» $1 Million Identity Theft Insurance. LifeLock was one of the first companies to offer $1 million in identity theft insurance. After which, most other companies followed this practice. Trusted ID also offers this too. Other services in the market offer identity theft insurance ranging from as low as $25,000 but more services are now offering the $1 million guarantee (or warrantee, in some cases).

I had to seek clarification on this cause this identity theft insurance could be tricky. The main gist of this $1 million insurance is that in the event that you fall victim to identity theft, these companies will spend up to $1 million to hire or pay lawyers, investigators, consultants, other specialists to help you. These companies will do whatever it takes to restore your name and recover any direct losses as a result of the identity theft. Just so you are aware, no money passes directly to members of these identity theft protection services.

» Online Monitoring. If your personal data has been stolen, chances are that this is being bought and sold on the internet. LifeLock and TrustedID both have ways to monitor and detect whether your information is being sold online.

» Fraud Specialist. If you ever become a victim of identity theft, these services will provide you with a fraud recovery specialist who will give personal assistance to help resolve the issue. Such personalized service is really needed most especially when you do not know where and how to start the process of notifying the proper authorities and institutions in the event that your identity is stolen.

Should You Even Use Any Of These Services At All?

A lot of so-called identity theft industry experts say that the service offerings that LifeLock and TrustedID provide are something you can do yourself ... that is if you know what to do and if you have the time to do them all.

If you do some searches on the internet, chances are that you will find a list of what you should do to protect you and your family from identity theft. This includes making the calls yourself to various agencies, writing and requesting for information, requesting to put certain accounts on credit freeze, etc. 

This brings me to the question: Do I really have the time to do all of these? Furthermore, will I have all the up-to-date information to do all these myself? Some people may have the time to do all of these while others may be too busy to even deal with it. Other people may have all the time to do this but may not know exactly what to do. So you really have to ask yourself which category do you fall in.

... these identity theft services can do all the monitoring for you while you can focus on other stuff that matters more to you.

Regarding the price of the service, for prices ranging from $10 to $17 a month, these identity theft services can do all the monitoring for you while you can focus on other stuff that matters more to you. You have to ask yourself how much is your time really worth. Will you be spending just an hour or a couple of hours a month doing what these companies can do for you? Is your time worth more than $10 (or $17) an hour or less than that? If you answered more, then you probably might be better off having these companies do the work for you. I really think that the monthly fee is a small price to pay for the peace of mind and security that you get with these services.

So Which Identity Theft Protection Service is Best?

The bottomline benefit that you will get when you enroll with either of these services is that in the event that you have a stolen or fraudulent identity incident, you will get the benefit of a more centralized support system to take care of what needs to be done to negate or at best, minimize the impact of such an incident.

So this begs the question ... which of the two services provides the best identity theft protection? To be honest with you, it's really a tough choice cause the differences between these two services are very subtle. The choice of which one to use will really depend on what suits your purpose and your personal preference. However, there are other factors that might appeal to various customers such as the following:

» Market Leadership. LifeLock has been a trailblazer and industry leader. The company started its business back in 2005 and since then, a lot of other "me too" identity theft protection companies have sprouted. LifeLock currently has more than 1.7 million members and still going strong. LifeLock is an award-winning organization.

On 24 August 2010, Inc. magazine ranked LifeLock 8th on its 29th Annual Inc. 500 List, an exclusive ranking of the nation's fastest-growing private companies. In addition, LifeLock is recognized as #1 in the Inc. 500's Security category. The list represents the most comprehensive look at the most important segment of the economy, America's independent-minded entrepreneurs. Companies such as Microsoft, Visa, Zappos, GoDaddy, Under Armour, Jamba Juice, American Apparel, Oracle, and hundreds of other powerhouses gained early exposure as members of the Inc. 500.

LifeLock has also been recognized by the American Business Awards as Best Overall Company, by AlwaysOn to the Top Global Company 250 list, and most recently by Arizona Corporate Excellence as Arizona’s Fastest Growing Company. So if you prefer a market leader, then you might like to seriously look into LifeLock.

» Solid Business Backing. Lifelock is a privately held company that has only been around since 2005. However, the company is backed by some of the largest private equity investors that includes Goldman Sachs, Kleiner Perkins Caufield & Byers, Bessemer Venture Partners, Gold Hill Capital, and Silicon Valley Bank.

TrustedID is also a young, privately held company. The company counts among its investors Opus Capital and Draper Fisher Jurvetson.

» Partnerships and Endorsements. Reputable and market leading services are usually endorsed and backed by other major companies. These are the types of services that I usually also look for because this gives companies some staying power in the market. Having such partnerships assures you that the service that you are using will not just go away.

LifeLock has a major partnership with Symantec, the world's largest antivirus software company and maker of the Norton PC protection line of software. This partnership between LifeLock and Symantec includes bundling the two companies' products, educational outreach, and a joint lobbying effort for stronger penalties for identity thieves. In fact, Symantec strongly believes in LifeLock's business and made a "small strategic investment" in the company in August 2009.

So if you are budget conscious and plan to have your family protected too, I think TrustedID offers the best value for your money.

» Value For Your Money. LifeLock has a tiered pricing plan. The company has the basic LifeLock package which cost $10 a month. The LifeLock Command Center package includes the basic package plus some additional monitoring services and cost $15.00 a month. LifeLock does not offer a family plan. Each member of your family will need to be enrolled in an individual plan.

TrustedID has a tiered pricing scheme. For an individual plan, Trusted ID has the lowest cost at $8.25 a month. Now if you have a family and you plan to have them protected too (which you really should most especially since the incidences of stolen identities for minors and young kids continue to grow each year), TrustedID has a family plan which cost $15.83 a month. So if you are budget conscious and plan to have your family protected too, I think TrustedID offers the best value for your money. 

A Final Thought

There is no room for complacency regarding this issue cause the impact of such a crime can be devastating to anyone, regardless of your financial stature.

You need to keep in mind that these services are not the end-all and be-all of identity theft protection. You should not solely rely on these services for personal data protection. You need to do your part and apply some of the best measures to protect your personal information from getting into the wrong hands. You need to think of these companies as just one of the tools in your arsenal to protect yourself and your family from the financial and emotional wreckage that identity thieves can cause you.

Becoming a victim of identity theft can be one of the most unpleasant and aggravating experiences that you can ever have. There is no room for complacency regarding this issue cause the impact of such a crime can be devastating to anyone, regardless of your financial stature. The age old wisdom of "an ounce of prevention is better than a pound of cure" very much applies to the growing issue identity theft.

So now the question is should you remain reactive or become proactive? We'll leave the ultimate decision to you.

Disclosure: Compensated Affiliate

LifeLock is proud to announce the launch of LifeLock Ultimate, the most comprehensive identity theft protection available. LifeLock Ultimate offers a bigger network, better protection, and faster notification. 

This all new service combines the latest advancements in identity theft protection with robust credit management tools to provide consumers the ultimate in peace of mind and protection.

In addition to all of the services included in standard LifeLock identity theft protection membership, LifeLock Ultimate offers:

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- Address Change Verification

- Advanced Internet Monitoring

- Reduce Pre-Approved Credit Offers

Protect your money, keep your good name clear, and eliminate unwanted surprises with LifeLock Ultimate.

Identity Theft Ranks No. 1 on FTC Consumer-Complaint List

March 8, 2011, The Wall Street Journal

WASHINGTON—New U.S. Federal Trade Commission data show that identity theft continues to be a top concern for consumers.

The commission Tuesday released a list of the top consumer complaints received by the agency in 2010, and for the 11th year in a row, identity theft ranked No. 1.

The agency received more than one million complaints last year, and 19% were related to identity theft.

Florida had the highest per capita rate of reported identity-theft complaints, followed by Arizona and California.

Experts say thieves are using more sophisticated tactics to either steal personal information or con consumers into willingly turning over information. Some scammers are using fake identities when applying for jobs, signing up for utility services or filing taxes.

Government documents/benefits fraud, which occurs when someone steals a person's identity to obtain federal benefits such as welfare and unemployment aid, was the most common form of reported identity theft, followed by credit-card fraud and phone and utilities fraud.

Identity theft "continues to be a big problem," said Consumer Federation of America consumer-protection director Susan Grant. "With more and more personal information about consumers being collected by more and more companies, government agencies and others for various purposes, the fact remains that there are still problems with security breaches, where consumers' information is stolen by identity thieves."

She added that consumers are still being tricked into turning over personal information to thieves masquerading as banks or other entities.

"There are lots of root causes of identify theft that still have not been resolved," Ms. Grant said.

Adam Levin, chairman and co-founder of Identity Theft 911, said the economic downturn isn't helping efforts to address ID theft.

"The frontline in the war against identity theft for years has always been the states, and yet every state is in total economic disarray," which means enforcement activities are being cut back, said Mr. Levin. Debt collection complaints came in second place on the FTC's list, making up 11% of the complaints. In addition, the data suggest that more consumers are becoming victims of "imposter scams," in which scammers pose as family members or legitimate companies in order to persuade consumers to send them money. The FTC's 2010 consumer-complaint list marks the first time that imposter scams made the top 10.

Complaints about Internet services, sweepstakes, catalog sales, Internet auctions, counterfeit checks, telephone services and credit scores also made the top 10.

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Citigroup: $2.7 Million Stolen From Customers As Result Of Hacking

June 27, 2011, The Huffington Post

After a cyberattack hit Citigroup, exposing over 360,000 user accounts, the bank has come forward to reveal just how much money's been lost. The answer: $2.7 million was lost, affecting about 3,400 people, according to Bloomberg Businessweek. The bank will reimburse customers for their loss. Over 200,000 customers were issued new cards with a notification letter.

Citibank has been criticized, however, for not offering customers a full year of preventive credit file monitoring services, the standard for large companies having suffered such attacks.

Experts have suggested that hackers used spyware to capture data from customers as they logged in, though they were not able to get the CVV codes that accompany the physical card. With 154 million Americans owning credit cards, the incidence of such hacks is only expected to rise.

The first half of 2011 has already seen a number of major hacks, including, but not limited to, a series of hacks on Sony, subsequent hacks on Sega, PBS, the CIA, the Senate, and more.

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While doing my research on identity theft, I came across the following startling statistics about this growing concern.

According to James Van Dyke of Javelin Strategy Research, identity theft is "a crime that's almost impossible to catch when done in a sophisticated manner and a crime in which enforcement is very limited." With the increasing trend in digitized data and the growing sophistication of identity theft perpetrators, the odds of becoming a fraud victim continues to grow every year. It's not a question of whether identity theft can happen to you. It's a question of when.

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