Identity Theft Protection Services: Do They Really Protect You?

Source: iStock

Source: iStock

Identity theft is a growing problem that doesn’t seem to be going away any time soon. If you’re concerned about protecting your sensitive financial information, your first thought may be to purchase an identity theft protection service. However, if you don’t do your research, you could end up with a product that does not protect you. In fact, you could unknowingly make your data even more vulnerable. The FTC alleges this may have been the case with identity theft protection company LifeLock.

The Federal Trade Commission recently cracked down on LifeLock for allegedly violating a settlement order. Consequently, the company will be required to resolve the issue with customers by paying up to $100 million in full refunds.

This situation began back in 2010 when LifeLock consented to settle FTC charges claiming the company used deceptive claims to advertise its identity protection services. According to the FTC, customers who decided to put their faith in LifeLock and purchase their products were not receiving the level of protection promised by the company. According to the commission, LifeLock was not as stringent in their protection efforts as it could have been.

The terms of the 2010 settlement required LifeLock to cease making misleading claims, reinforce efforts to keep customer information safe, and pay the FTC customer refunds to the tune of $12 million. However, the FTC said LifeLock failed to hold up its end of the bargain.

The allegations

The company has been accused of not establishing a security program that would sufficiently guard customers’ sensitive information, leaving data such as credit card, Social Security, and bank account numbers vulnerable. The FTC also says LifeLock made false claims that it shielded consumers’ sensitive information with bank-grade security measures. Another allegation is that LifeLock did not live up to its promise to send alerts as soon as an indication of customer identity theft was received.

How to shop for identity theft monitoring products

Source: Thinkstock

Source: Thinkstock

The Federal Trade Commission says the key to obtaining quality service is to do your part when it comes to investigating a new product or service. Here are some ways to make sure you’re getting what you pay for.

1. Do your research

If you decide to pay for identity protection services, make sure to choose a reputable company. Do your research to verify the organization has not had any recent troubling complaints. The FTC recommends researching the company online by typing the company’s name followed by the words “complaint,” “review,” and “scam.” Make sure to read more than one review so that you can get a good sense of whether or not you should do business with the company.

2. Educate yourself

Learn how identity theft happens. When you understand how this crime works, you can take more effective measures to reduce your chances of becoming a victim. Although identity theft cannot be prevented, every little bit helps when it comes to lowering your chances. One way to do this to refrain from carrying unnecessary personal information. For example, never carry your Social Security card in your wallet unless it is absolutely necessary. If someone gets a hold of your information, you may not be able to get another Social Security number.

3. Consider monitoring your own finances

Know that you have options when it comes to identity theft services. You can save yourself some cash by regularly reviewing your credit reports and checking your financial statements. It’s not necessary to pay someone when you can do this yourself.

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