LifeLock Guarantee ‘Full Of Holes’
So what’s wrong with the Lifelock guarantee? The promise to replace up to $1 million should you be a victim of identity theft whilst under their protection is cited by many as the main reason for signing up and agreeing to pay Lifelock $10 a month.
Here’s the wording of the Lifelock guarantee: “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.”
The bit you need to pay attention to is the “failure or defect in our service” part.
Some might interpret this as saying you are only covered by their guarantee only if they forget to place the fraud alert and as a direct result of that is that your identity is stolen.
If a credit issuer ignores the fraud alert (as happened to Lifelock CEO Todd Davis when someone used his Social Security number to take out a payday loan) and gives out a line of credit to someone using your name fraudulently, that is not the fault of Lifelock so you are not covered by the terms of their guarantee.
There are currently several class action lawsuits against the Lifelock guarantee such as the case of 25-year-old Nathaniel Faulhaber of Parsonsburg, Md., who signed up with LifeLock in May 2007 only to later find out that an identity thief had applied and obtained a total of five credit cards in his name — all while he was supposedly under LifeLock identity theft protection.
His lawyer said, “Not only did the primary service not work, but he also found the LifeLock guarantee to rectify any defect in that service to be useless. LifeLock and the third party entities it employs have provided so little meaningful assistance to Faulhaber that, ironically, he now finds himself in the same situation he would have been in had he never paid LifeLock a dime.”
The fraud alert LifeLock places on your behalf simply recommends any loan or credit company should use “reasonable policies and procedures” when someone requests a new line of credit. You must remember that:
It doesn’t stop the waiter you didn’t tip last night taking the details of your existing credit card that you used and going on a spending spree.
It doesn’t stop anyone emptying your existing bank accounts.
It doesn’t stop someone using your name to get a job and then stealing from the company.
It doesn’t stop someone giving your name to police when stopped and questioned.
It doesn’t stop someone giving your name at the hospital after getting treatment and committing medical identity theft.
It doesn’t stop the lender ignoring the fraud alert because they want to make the sale.
The fact is that no identity theft protection service can stop identity theft from occurring. What makes LifeLock different is that it offers proactive service, which will render your information useless to anyone but you. If your information is ever compromised, you’ll be notified and damage control begins immediately. That’s the LifeLock guarantee.
