Identity Theft Tools and Insurance.

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 Attorney’s, Investigators, or Accountants.  It doesn’t 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 doesn’t reimburse you for the time you spend sorting out all 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 really 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” will these fee’s 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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