Here and on WalletPop.com (AOL’s personal finance site), I’ve been discussing a company called LifeLock. They purport to help people prevent identity theft. They’re slick marketers and they’ve really capitalized on people’s fears of identity theft. But I don’t like the company or its services.
One of the reasons I don’t like the LifeLock service is because I don’t think it’s worth the money. Consumers can do more for free on their own, than they get from LifeLock. (Their main service involves placing a “fraud alert” on your credit report, which is not worth much to a consumer. They need a “credit freeze” to have a reasonable chance of protecting themselves, and LifeLock doesn’t offer that.)
And the other reason I don’t like LifeLock is because of their “$1 million guarantee.” I don’t think that guarantee is worth a darn thing.
Oh, and about those new services they recently added: How laughable that they’ll “monitor chat rooms” for people who might be talking about your social security number!
Today I’m focusing on their phony guarantee. I call it phony because it offers almost no protection for the consumer. So it’s not worth the paper it’s printed on. And I don’t think most LifeLock customers are really aware of how worthless the guarantee is. Let me explain…
Here’s what their marketing spiel says about the LifeLock guarantee (bold added by me):
If your Identity is stolen while you are a member of LifeLock, we’re going to do whatever it takes to recover your good name. If you need lawyers, we’re going to hire the best we can find. If you need investigators, accountants, case managers, whatever, they’re yours. If you lose money as a result of the theft, we’re going to give it back to you.
We will do whatever it takes to help you recover your good name and we will spend up to $1,000,000 to do it.
We don’t think you will see a guarantee like this anywhere else from any other company. If you do, let us know because we’d like to do business with them. There isn’t much fine print in our Guarantee. To see the details, click here.
If you have a reason to think that you will become a victim of Identity Theft, we can help you stop looking over your shoulder, because we’ve got your back.
Lifelock will do whatever it takes? Not so much. They really won’t do anything it takes, as you’ll see in the fine print. They say there’s not much fine print, but it looks like they don’t need much to never help you. Here’s that fine print in its entirety (bold added by me):
Our $1 Million Service Guarantee
Our service guarantee is simple, but it is limited. We will pay up to $1,000,000 to cure the failure or defect in our service, per member, per lifetime for all incidents in the aggregate, regardless of circumstance (*In North Carolina, we will make payments to professionals we choose). We will not reimburse special, incidental, indirect or consequential damages, such as lost wages or profits, loss of business, or lost opportunities. Other than our service guarantee, we make no representation or warranty about our service of any kind, and we disclaim any implied warranties outside of our service guarantee, such as a warranty of merchantability or fitness of our service for any particular purpose.
Our Service Guarantee (Warranty) is in support of our Service under the Terms and Conditions Agreement and is provided without additional charge:
A. If you are our member when someone accesses your personal identifying information and subsequently uses it without your authorization to commit a fraud, due to a failure or defect in our Service, and you have complied with this Agreement, subject to the terms herein, we will pay professionals to assist in restoring any such loss or recover such expenses, as required, provided however that the maximum limit of our Service Guarantee is $1 (one) million per lifetime for all incidents in the aggregate.
B. You must be truthful with us and you must tell us of the use of your personal identifying information without your authorization to commit a fraud within 30 days of first learning of it. You agree to cooperate with those we hire to help you.
C. If you need professional assistance to help remediate damages caused by the failure or defect in our Service, we will arrange for, and cover the expense of, that assistance to be provided to you through persons or firms we select; we will not reimburse fees of professionals or other service providers unless we choose those providers for your particular matter. Any such professionals, if required or applicable, will be licensed in the jurisdiction where your particular matter resides.
D. We will cure any failure or defect in our Service, resulting in damages you incur, subject to the terms of this Agreement as follows:
(i) If the amount involved is over $1,000, we reserve the right to investigate the Service Guarantee request in order to determine whether the request is valid before we do anything else. We will perform our investigation as promptly as we can. If our investigation shows that a reasonable person would conclude that your personal identifying information was used without your authorization to commit a fraud while you were a member and you have complied with all this Agreement, we will perform as described herein.
E. If we find that you intentionally misrepresented damages or committed a fraud related crime and misrepresented that you were a member when your information was misused, you agree to pay us back upon demand any amount we have paid in connection with your claim, including any costs we incur to collect the money from you. Being found guilty of a crime related to the loss which you attributed to identity theft is sufficient evidence to conclude that we are entitled to recover all amounts paid on your behalf as described above, but it is not the only basis upon which we may so conclude.
F. Similarly, should we decline your Service Guarantee request following our investigation and that decision subsequently is determined to have been wrong, we will honor our Service Guarantee.
Revised on 1 October 2007
Let me break down the good stuff in bold above:
- They will pay $1 million “to cure the failure”
- But only if the identity theft happened because of a “defect” in their service
- And they won’t pay you any money for any losses you claim
- They’ll only help resolve the debts incurred in your name by the thief and fix your credit report (but again, only if it was because of that defect)
- Reminder: only if their service has a defect
- They’ll pay professionals to help (but only if there’s a defect)
- You don’t decide who helps (if anyone); LifeLock decides
- They only fix defects
- And you have to be truthful with them
I’m not an attorney, but I don’t think one needs to be an attorney to understand what’s said in their guarantee. The only way they will help you is if there is a defect in the LifeLock service that led to your identity theft. Good luck proving the identity theft was because of a defect. Why do I say that? Read on.
Would any of these instances causing your identity theft be a result of a “defect” in their service?
- Your wallet is stolen
- A computer at your bank is hacked
- Someone steals your trash with personal information in it
- There’s a fraud alert on your credit report, but a company issuing a credit card in your name decides not to check your credit report when someone is applying for their card
You can see that none of those situations is LifeLock’s fault, but they can all lead to someone ruining your credit. Your ruined credit is what LifeLock wants you to think they’ll fix. But I don’t think they will. Not in these situations. (And if I’m wrong about this, I’m sure LifeLock will immediately issue a press release clarifying that the $1 million guarantee applies to stolen wallets and such.)
What might be a “defect” in the LifeLock service?
- LifeLock forgetting to put a fraud alert on your credit file
- LifeLock not opting you out of pre-approved credit offers
But do any of those cause identity theft? No. That pre-approved credit offer coming to your house when you didn’t want it to doesn’t cause identity theft. But the naughty man stealing it out of your mailbox is the cause of identity theft. Good luck arguing with LifeLock about whether or not that naughty man is a “defect” in their service.