After last week's article
about credit monitoring it seems only natural to focus on Identity
Theft Insurance and Protection.
What does identity theft
protection mean? Identity theft protection comes in the form of
searching for information and insurance. The insurance aspect
usually covers some of the costs for attorneys, investigators, or
accountants. It does not cover the actual loss of money for
charges incurred on your credit card or accounts that were opened in
your name by the thief. It does not reimburse you for the
time you spend sorting out all of the problems that need to be resolved
from this crime. Some policies will reimburse you for income
lost if you have taken time off from work to fill out police reports,
etc. This reimbursement is a limited amount of money. The
definitions of terms in these policies are very general and many of
them will not cover New York State. I don't understand
why you would need a CPA or investigator if you are a victim of this
crime. It seems that there are departments of the government
that are doing the investigating already. Our tax dollars are
paid to cover the Consumer Fraud Division, the FBI, and the Attorney
General. In a majority of instances these crimes are committed
by a family member or someone you know. If that is the case
these insurance policies will not cover the costs.
Companies like Lifelock state
that they are scanning public records, credit card applications,
social security card requests, and chat rooms on the internet.
I do not know exactly how this works but I am joining personally to
see if these are valid claims. I will keep you posted on what
my experience with them is. What I do know they are doing, for
the most part, is putting fraud alerts on your credit profile,
updating them every 90 days, and opting you out of promotional offers
on credit cards. Many Banks and Insurance Companies offer
products for protecting your identity as well. It makes you
wonder about their ability to protect your identity when they are the
same companies that are contacting consumers to warn them of security
breaches that they themselves are experiencing. So if they are
making you more susceptible to becoming a victim in the first
place how can they possibly protect you?
Did you ever see the
commercial about the CEO of Lifelock, Todd Davis, who had
his social security number listed on the side of a
bus? He stated how comfortable he felt displaying those numbers
to the world because of his confidence in his company's ability to
protect consumers from identity theft. Well he did become
the victim of identity theft after revealing his social security
number publicly. I found it interesting that under the
terms and conditions of their Lifelock product it states that you
cannot display your social security number publicly. This
is considered by them to be reckless behavior. Here is the
exact wording written under the conduct portion of the terms
and conditions:
"You will not recklessly
disclose or publish your Social Security number or any other Personal
Information"
It was also surprising to see
that all services provided by Lifelock are governed by the laws of
Arizona? Do you know what the Arizona laws are? I
don't. So I guess you need an attorney in Arizona that can really
explain how that would affect you if you had your identity stolen and
needed Lifelock to cover your damages.
Here is the exact quote:
"This Agreement and any
Service provided here under will be governed by the laws of the State
of Arizona, without regard to any laws that would direct the choice
of another state's laws and, where applicable, to be governed by the
federal laws of the United States."
If you do have your identity
stolen while using Lifelock they assure you they will cover up to
$1,000,000 for your lifetime. This $1,000.000 is not for direct
losses due to the theft but for Attorney or Professional fees such as
Investigation fees. Lifelock states that based on "their
judgment" these fee's will be paid. That is pretty general
and gives them a lot of room to deny payment. This is an exact
quote.
"LifeLock will retain
and pay for those third party professional services that are
reasonably necessary in LifeLock's judgment to assist you in
restoring losses or recovering your lost out-of-pocket expenses
caused by such fraud. LifeLock will pay such third parties up to a
maximum of one million dollars ($1,000,000) over your lifetime for
all such fraud incidents"
So in the light of day this
company, which seems to be the most highly recommended, doesn't have
much faith in their own abilities based on the fine print.
Next week I will discuss what
both credit monitoring and identity theft protection are good for and
how to best protect yourself from identity theft.
Feel free to call us if you have any questions!
Great credit
brings great opportunity!!
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