The myth of ID prevention
Todd Davis, CEO of Lifelock had his identity stolen. You’ve probably heard him on commercials giving his real social security number (457-55-5462) to prove the effectiveness of his service. Well it has recently been discovered that his ID has been proven to be stolen at least once and attorneys claim that they “found records of other people applying for or receiving driver’s licenses at least 20 times using Davis’ Social Security number”.
Davis confirms the one incident in a statement on his Lifelock’s website.
“A year ago, a Texas man used Davis’ Social Security number to get a $500 payday advance loan. Davis points out that the check cashing company made no attempt to verify the identity, which he believes would have stopped the theft cold, but says that’s not the important part of the story.”
I’m not so concerned about Mr. Davis’ ID theft as I am about the way ID theft prevention services present themselves to the public. Warning, soapbox ahead.
Companies may be able to offer assistance in restoring your identity and covering any losses but theft prevention is a marketing myth. If that weren’t enough these businesses use fear tactics and manipulated statistics in order to scare consumers into buying their services.
Where does the majority of identity thefts take place?
B. Dumpster Divers
C. Bad men in Alleys
D. New Orleans
E. None of the above
The vast majority of ID thefts are the result of malicious software activities or corporation hacks and leaks. How do you propose to stop that? As a third party you can’t. Period. (It is important to note that the credit card companies could take action to drastically reduce your exposure like keeping transaction data at Visa instead of forcing every retailer to hold your CC data but they aren’t interested.)
One of the so called ID theft prevention companies uses the fact that an identity is stolen in the US every 3 seconds. We all know that statistics say most anything with the right manipulation. So let’s do the math, for this statistic to be true you’d need around 10.5 millions id thefts a year… Sounds like a lot. However, once you consider that TJ Maxx had 45.7 million accounts stolen in a single instance then your perspective changes.
ID theft prevention companies have people scared to death of thieves in dark alleys and they sell a false piece of mind. I do know that these companies have early detection and restoration services that are probably quite good but that is not how they market themselves.
Even Lifelock’s CEO stated,
“No one can stop all identity theft, and don’t believe anyone who says they can, but look at what we’ve done. Our proactive approach has resulted in successfully protecting over 99 percent of our members. That’s unprecedented. And the less than 1/10 of 1 percent that did fall victim to identity theft were completely covered by our guarantee.”
Save your money. Read your statements. Get credit reports.