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Protecting your identity

Hire identity theft help or do-it-yourself

Davis says LifeLock works with authorities to make sure blemishes never appear in a client's credit or public records. The company also repays losses, cancels charges and works on behalf of the victim to clean the situation up, he says. If a victim is thrown in jail because somebody committed a crime posing as them, the company bails them out and hires a lawyer.

For $10 a month, LifeLock will set up fraud alerts with all three credit bureaus. These require creditors to verify identity before opening new lines of credit. LifeLock will restrict junk mail, such as preapproved credit offers.

Perhaps the biggest selling point for LifeLock is its $1 million service guarantee. Davis says 22 people have enacted the guarantee, and all received payment. He did not say how much the recipients received.

However, Davis admits that LifeLock cannot stop all forms of identity theft. For example, Davis' decision to brazenly reveal his Social Security number led to his own identity being stolen by an Arizona man who cashed a $500 check using the CEO's name.

Davis says his lost identity was a good thing for the company, saying his company's automatic fraud alert wasn't activated in this instance because the check casher facility didn't use the three credit bureaus.

"That's the perfect example of why (nobody) is 100 percent bulletproof," Davis says. "It was no pain for me and what happened for me would happen exactly for our clients."

Skeptics unconvinced
However, such claims have failed to convince skeptics like Kenney. She questions LifeLock's claims of hefty guarantees.

"The $1 million service guarantee covers only losses associated with a defect in LifeLock's service," she says. "Thus, unless you become a victim of ID theft because LifeLock didn't do something it said it would -- things that wouldn't normally actually prevent ID theft -- the service guarantee is inapplicable.

"So, you would have to prove that you were a victim because LifeLock didn't do what it said it would do."

Kenney also isn't buying Davis' attempts to explain his own identity theft.

"It is not at all clear to me that the services they gave to their CEO to clean up the mess would have been available to the average consumer," she says. "The fact that the ID theft occurred in the first place helps demonstrate the weakness of the services the company offers."

Some customers also have become disenchanted with LifeLock. Recently, LifeLock consumers in three states -- Maryland, New Jersey and West Virginia -- filed lawsuits against the company, claiming LifeLock knowingly misleads people by claiming its service offers comprehensive protection against identity theft.

Davis has called the lawsuit's claims "unfounded" and stands by both the company's advertising and the $1 million guarantee it offers as a backup, according to an Associated Press story.

Despite such controversies, identity-theft protection services stick to their guns.

Joseph Campana, founder of J. Campana & Associates, an identity theft and security firm, says identity theft services are beneficial and receive a bad rap from consumer advocacy groups.

"Most consumer advocates loathe these services and unconditionally advise consumers to do it yourself. That's irresponsible," says Campana. "Most consumers don't know how or will never find the time to do it themselves."

For $10 to $20 a month, Campana says, a family can obtain valuable services to help prevent and detect fraud and restore their identities should they become a victim.

-- Updated: May 23, 2008
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