Critics take note: LifeLock’s services are proven

September 21, 2010 – 11:16 am

LifeLock, the leader in proactive identity theft protection, undoubtedly takes a beating from its detractors. The company has been sued by credit bureaus, competitors and lawyers in several states. Yet the company is still growing and still making it easier for its customers to sleep at night, knowing their identity information is locked down.

There are a lot of misconceptions out there when it comes to LifeLock and how its services work, and in the history of all the “hate” spewed in the company’s general direction.

In December 2003, as part of the Fair and Accurate Credit Transactions Act, credit bureaus were forced to allow consumers to place fraud alerts on their credit reports, requiring lenders to verify identity before issuing credit. The alert is temporary, and expires after 90 days. Several companies, including LifeLock, automatically renew these alerts and, in effect, make them permanent.

This makes the credit bureaus crazy because the practice takes time and money, and is one more obstacle between you and that bright, shiny, new piece of plastic. LifeLock also opts its customers out of pre-approved credit cards which, when coupled with the alerts, makes LifeLock’s customers less appealing to those the credit bureaus would sell your credit information to. In other words, LifeLock’s customers are less valuable “goods.”

The credit bureaus began a smear campaign, and the lawsuit parade began. One of the most famous accusations against LifeLock is that the service didn’t even work for its CEO, Todd Davis. Someone in Texas used Davis’ Social Security number to obtain a $500 payday loan. The scam worked because the loan operation didn’t check with the credit bureaus before approving the loan. When the lender called Davis to collect, LifeLock got involved and the issue was cleared up. LifeLock did exactly what it claims it will do – Davis’ credit was restored.

One of the biggest complaints the credit bureaus have had is that fraud alerts are only for people who have been victims of identity theft. The law doesn’t read that way. It states that anyone who “asserts a good faith suspicion the the consumer has been or is about to become a victim of fraud or related crime” can request an alert.

Another complaint is that LifeLock pours on the fear. Critics allege that LifeLock makes people so afraid of what might happen that they are quick to sign up. Not true. LifeLock does seek to educate people about the dangers of identity theft. Who can fault them for that? In this day and age, with the incidents of this crime growing almost daily, we need to be armed and ready. LifeLock is simply prepping people, giving them the tools they need to be prepared and protected.

Some have criticized LifeLock because of the monthly fee doesn’t seem to produce anything. You get no phone calls, no mail, no e-mail…nothing unless there is a threat to your personal information. If LifeLock is doing it’s job, you should hear anything, should you?

All in all, there are two ways to prevent identity theft: make personal information harder to steal and make stolen personal information harder to use. We can’t do anything about the former, but LifeLock has proven it can take care of the latter. Critics should take note.

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