Should I buy LifeLock?

JPG-LL_Brnd_Sig_hor_full_color21st Century society is incredibly efficient.  I am often amazed at how quickly my market needs are filled.  I can order practically anything online at Amazon.com and have it delivered to my house overnight.  I can book plane tickets, a rental car, and a hotel reservation at thousands of locations around the globe, and I can buy nearly anything, anywhere, without cash just by flashing plastic.  Unfortunately, increased efficiencies often result in reduced security.

Identity theft is a serious threat, and it continues to be the number one complaint received by the Federal Trade Commission, with American consumers reporting losing over $1.6 billion to fraud in 2013.  By now, most folks have heard about the security breach at the national department store Target, where identity thieves broke into Target’s computer system and stole personal information on thousands of customers who had used credit and debit cards at Target stores.  The threat is real, and with this threat comes a heightened level of anxiety.

In the last few years clients have asked me about LifeLock, a company that claims to help customers prevent identity theft.  For $110 per year, LifeLock promises to pay up to $1 million in expenses to restore a person’s stolen identity.  They also promise to monitor your accounts for suspicious activity, scan for potential identity theft threats, respond to cases of identity theft, and track your credit score for possible problems.  Sounds like a pretty good deal, but is it?

Unless you are a high risk target (e.g., you are going through a nasty divorce, recently fired a disgruntled accountant, or you frequently hand out to strangers your personal identifiable information), I think LifeLock is unnecessary.  In many cases, your bank or credit card companies already offer you protections (check with your financial institutions for more information), against stolen identity, and you can monitor your own credit report 3 times a year through annualcreditreport.com for free (submit a credit report request to each of the three credit bureaus listed on the site once per year staggered every 4 months).

Having LifeLock is a lot like wearing a belt with suspenders.  It really isn’t necessary, but it does make folks feel more secure.  It is rather expensive insurance relative to the monetary risk, but its cheap price of $10.00/mo does make some folks sleep better at night.  Rather than hire LifeLock, I prefer to practice personal security instead.  I use cash for most purchases, and I only occasionally use credit cards; this reduces the risk of credit or debit card information being stolen.  I am careful about who I share my personal information (like account numbers, social security number, or my computer passwords), particularly over the phone with people I don’t know or trust, and I monitor my financial statements closely for unusual activity.  I think the best defense against identity theft is personal vigilance, and by taking a proactive approach, I can spare myself the extra cost of having LifeLock remind me to be careful.

I encourage everyone to take responsibility for securing their personal identity, but it is doubtful LifeLock is necessary for most people.

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