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LifeLock or Trusted ID: Which Is Best?

Identity Theft Is Top Consumer Complaint

According to the 2012 Federal Trade Commission (FTC) report on consumer complaints, identity theft remained the top consumer complaint in 2011. The FTC received 270,156 complaints on identity theft, accounting for 15% of the total 1.8 million consumer complaints last year. This puts identity theft at the top of the list of consumer complaints for the 12th 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. It's no easy task to clear up one's name once you become a victim of identity theft. In fact, according to the FTC, the recovery process can take an average of 30 hours and thousands of dollars to correct. Add to the this the stress and emotional burden of having your privacy invaded, being an identity theft victim is really a serious matter.

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 may not be enough.

Identity theft protection services, on the other hand, try to help protect against 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.

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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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