After the Lifelock scam was uncovered, few companies offer "only" ID Theft insurance anymore. Instead, it's a smorgasbord of supposed services and defenses to help you with the ID Theft problem. Here's what you might get for your money:
Insurance
Insurance plans are a risk equation that you'll almost always lose (or else the companies wouldn't stay in business). That's not to say that all insurance is a scam, but you need to weigh your actual risk versus the benefits. Do you really know what the conditions are for making a claim? Will you actually be able to collect? How much? Under what circumstances? According to a Forbes.com article:
The balance of the usual $5,000 to $15,000 coverage is available for legal fees to undo judgments and criminal records racked up by thieves in your name. But Federal Trade Commission statistics show that just 16% of ID theft victims suffer such problems, and only 40% report out-of-pocket costs greater than $1,000.
Even assuming your risk was as high as the fear-mongering suggests, you need to read and understand the terms of the plan before you have any assurance you're getting what you paid for. Tthe original version of LieLock's insurance plan which offered a "1 Million Dollar guarantee" (OMG!) was impossible to collect on based on their stated terms, but that didn't stop millions of people from signing up.
Dark or Deep Web Scanning
These terms refer to the parts of the Internet that aren't reachable by search engines. Private chat channels, forums and boards that are hidden from view, and so on. It's a real thing, but not nearly as nefarious as these companies make them out to be. Sure, there's a lot of illegal and nasty stuff out there, but if was that easy to find and "monitor", why wouldn't the authorities be doing something about it?
Granted, I've not worked for these companies and don't have first-hand knowledge of what they do and don't do, but their claims sound as ludicrous as if they had said "we have undercover people in crime rings who'll make sure that they pass over your address when choosing which houses to rob. Best of all, the only way for them to monitor your information, accounts, etc. is to have all the information and access themselves putting you at even more risk of breaches or unscrupulous employees.
Other Fluff and Nonsense
I tested one such company out and it was really uncomfortable to give them access to my social and other sensitive information, but you can bet I wasn't giving them my banking login details no matter what "protection" services they were supposedly adding.
And did you know that Lifelock is still listing "Lost Wallet Protection" as one of their "services"? I looked around their site and even their terms and conditions and couldn't find specifics, but if it's like what they used to offer, they would keep a list of company phone numbers for the various cards you keep in your wallet to make it easier for you to make all the calls and do all the real work if you lost your wallet.
Likewise, all these supposed benefits are loosely defined on average. Using psychologically proven words that give feelings of comfort like "guaranteed", "covered", "protected", "help", and so on, but very little information about what they actually DO, what they don't do, and how it all works. Almost as if it was more about making you feel good than actually helping.
Exercise
If you have been doing these lessons in order, this will look familiar from the ID Theft Monitoring lesson, but let's do it again. To really evaluate what you're paying versus what you get:
- Log into your service and take a look around. Make some notes about what they're actually providing to you.
- Rate each from 1 to 10 on two factors: 1) how well do you understand the feature, and 2) how valuable/important is it to you.
- In particular pay attention to terms surrounding any insurance plan. You really should make the effort to read their actual terms and exclusions. There's no shame if you lack the interest/motivation/skill/energy to do it… they're counting on it. Just keep in mind that it's insurance is devilishly hard to collect on and unless you know the terms as well or better than they do, your chances of collecting are probably depressingly low.
- Look through your email for messages from your monitoring service. Write down the number of emails received and, out of those, how many had important and worthwhile information.
Just like with Monitoring, hold on to your notes. Don't make any decisions on your paid services until we get to the Credit Report Freeze section!
Course Guide for: Goodbye Identity Theft
A credit freeze locks your credit report preventing any thieves from being able to open new accounts in your name leaving your credit cards and current accounts work like they always have. By implementing this one simple and free security measure, you can cripple the most common form of ID Theft.
