As you may have seen in the news, Lifelock, the company made famous by CEO Todd Davis freely giving out his social security number to the world, has been told by a California judge that they may no longer protect their customers’ credit by requesting fraud alerts be placed on the customer’s credit file. Lifelock was sued by Experian, one of the three main credit-reporting agencies who was fed up with these bogus requests being requested by companies (like Lifelock) who were using the fraud reports as their main method of protection and making a healthy profit in the process. Apparently it is not legal for companies to make these requests on behalf of a consumer; consumers are the only ones allowed under law to place a fraud alert on their file.
There is a Better Way to Protect Your Credit File
If you were a user of Lifelock or Debix, it’s good that you are concerned about protecting your identity & credit file. However, there is a better (and cheaper) way to go that will give you the same or greater protection without the monthly bill.
- Lock your credit file – This inexpensive activity actually does an even better job at protecting your credit than Lifelock was doing. Lifelock was putting a fraud alert on credit files, which should cause creditors to attempt to contact you for verification before giving out credit in your name. However, there is no guarantee that creditors would heed the fraud alert; they would still be able to view your credit report. Locking your credit report totally prevents access to your report unless you “thaw” your credit using a special password & means of identification prior to the request for credit report access. Because identity theft is rampant, and because of the huge amount of money Lifelock, Debix and others spent on marketing their identity theft products, most people are not familiar with the “credit freeze” option. However, according to many experts, including Clark Howard & Consumers Union, locking your credit is absolutely the best & cheapest option to truly protect your credit & your identity. For more information on how to lock your credit, see my earlier post on locking your credit: Stop Identity Theft, Lock your Credit Reports.
- Check your credit reports – Check your credit report annually (for FREE) using AnnualCreditReport.com. This website is the truly free (government mandated) way to check your credit report. All other sites (such as FreeCreditReport.com) are simply out to make money off of you by selling you some other services or reports. Make sure to visit AnnualCreditReport.com. When you look at your report, make sure all of the information on the report is correct and that there are no “surprise” credit lines that show up on your report.
- Cover your tracks – Purchase a shredder & shred anything that contains your personal information. When in doubt, shred it.
- Keep others out of your online accounts – Use strong passwords and a password manager to track the passwords. In a future post, I will detail how to come up with good passwords and how to use a password safe to keep them organized & secure. Sticky notes are not a good way to store your passwords! Be sure to subscribe to the RSS feed or E-mail updates to stay up to date with the latest tips!