LifeLock is a company I am asked about regularly. They are a heavy advertiser on both the web and radio. Yet while they’re a legitimate business, they’re also one of the most overhyped services out there. They sell into the fear about you having your identity stolen.
Identity theft is a real problem. The odds that you’ll have your identity stolen are around 1 in 15 during a given year. So LifeLock has done a great job making you feel safe if you pay them money. Their service starts at $10 monthly or $109 annually.
Yet the company got in trouble about 5 years ago for deceptive advertising and having done, ironically enough, a poor job protecting the info they had on you. They entered into a settlement with the states and the feds and restitution followed.
Recently, they reached a settlement with the Federal Trade Commission that will see them pay up to $116 million in fines and penalties.
Want more meaningful protection from identity theft than LifeLock has to offer? Do a credit freeze. You’ll pay zero to $10 per bureau, depending on your state. This will shut a criminal down cold when they try to apply for new lines of credit in your name.
And if you still do want credit monitoring, get it for free through CreditKarma.com.
What is a credit freeze vs. credit monitoring?
Credit monitoring essentially puts fraud alerts on your credit files with the 3 main credit bureaus. These alerts are meant to raise a flag to potential creditors, alerting them to carefully verify an applicant’s identity before extending credit. But very often these alerts are ignored.
That’s why a credit freeze is superior to credit monitoring. A credit freeze allows you to seal your credit reports so no new applications for credit can be initiated in your name without your knowledge. When you do a credit freeze with the 3 main credit bureaus, you get a PIN that only you know.
This PIN can be used by you to temporarily ‘thaw’ your credit so that legitimate applications for credit and services can be processed. Without this PIN, a criminal would not be able to establish new credit in your name even if they are able to take over your identity.
Freezing your credit files has no impact whatsoever on your existing lines of credit, such as credit cards. You can continue to use them as you regularly would even when your credit is frozen.
A credit freeze will cost you from zero to $10 per bureau (every state is different), but I think it’s worth it. You MUST freeze your credit with all 3 bureaus.
Consider a credit freeze for your child
If you have kids who were impacted by this breach, I’d recommend a credit freeze for them too. Unfortunately, not all states allow a parent or guardian to freeze their child’s credit. At the time of this writing, the states that allow it include Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Montana, Nebraska, Oregon, South Carolina, Texas, Virginia and Wisconsin.
If your state *doesn’t* allow it, you have to petition hard to get that changed. Here’s a form letter to request credit freeze legislation for minors.