Finding Legal Lucre In Identity Theft

A slate of companies legitimately profit from identity theft by offering services that the three credit reporting agencies refuse to make easily accessible to consumers. The Times brings us the stories of three such companies that are sucking the venture capital teat all the way to market:

  • Debix: For just $99 per year, whenever someone tries to open a line of credit, Debix will call and play your own pre-recorded approval message. Credit will be denied unless you enter the super-secret PIN.
  • LifeLock: Maybe not the best of the bunch, LifeLock offers to place and preserve fraud alerts on credit files. CEO Todd Davis promoted his company’s services by bandying his social security number about the internet, challenging anyone to defeat his company’s software; a scammer successfully pried $500 from a check-cashing firm using his identity.
  • TrustedID: For $12.95 per month, TrustedID places alerts and freezes on credit files. The credit reporting agencies recently began allowing consumers to request credit freezes for free – but they only last 90 days.

If the three privately-owned, for-profit credit reporting agencies want to keep the exclusive high honor of determining each American’s credit worthiness, they should offer these defenses to every consumer, free of charge.

In ID Theft, Some Victims See Opportunity [NYT]
(Photo: jyesko)

Comments

Edit Your Comment

  1. Trai_Dep says:

    Of course, the corporate apologists will cite this as being an example of how the Free Marketâ„¢ fixes all ills w/o any fearsome consumer meddling.

  2. Major-General says:

    @trai_dep: If you have a better suggestion than Free Marketâ„¢ (all rights reserved), I’m all ears.

  3. MickeyMoo says:

    @Major-General: How about legislation that favors consumers instead of corporations for a start? Those not wishing to participate are welcome to move to pseudo-tuscan gated communities built on former super fund cleanup sites (that the home builder has self-certified as safe) and feast on food which the manufacturer has deemed fit for consumption, seeing as industry self regulation has served us SO well over the last 30 or so years.

  4. Scuba Steve says:

    Complete Authoritarian government truly is the best solution, but it requires about 3 billion robots capable of doing most menial tasks, as well as a total lack of privacy and near omniscient leaders without a drop of bias or malevolence.

    Might take some getting used to, though.

  5. darkclawsofchaos says:

    @MickeyMoo: so you want proletariat revolution? I pretty sure most attempts turned out horrible and those revolutions that survived aren’t really that good, Americans maybe set up to under go this peacefully, but its not as beautiful as one would think

  6. DadCooks says:

    My question is, after you get tired of paying these companies (wonder if it is really doing any good) and cancel, does some minimum wage low life at the company pass your info on to an identity thief?

  7. Trai_Dep says:

    @Major-General:

    Opt-in to credit reports. Default is to not release unless verification from home phone number. No cross-selling data w/o (also opt-in) permission. Major ($1,000 per customer violated) penalties for companies that don’t follow common-sense data security protocols. Free credit freezing at consumer request, and unfreezing, then refreezing (or, credit-granting windows authorized by customer, in other words). NO blind pre-approved credit cards mass-mailed w/o customer request. Consumers have option to be notified via email every time their credit history is pinged.

    Aww, heck. Just give US consumers the same freedom from financial ID rape that our European cousins enjoy, and their economy seems to bubble along just fine working under.

    In short, make the credit reporting agencies treat our credit data as conscientiously as they’d do it if it was their mom’s credit history. No more, no less. Plenty of money-making opportunities would remain, with none of the abuse.

  8. Parting says:

    @Major-General: Yes, some regulations never killed anybody. If there was no regulations in medication, food, etc. your life would be much more miserable.

    A savage Free Market is not a good thing (check Medieval history, a kind of Free Market, with everyone for themselves).

    Some regulation permit a healthy Free Market, with less abuse towards customers, who are humans by the way. An e-coli poisoning caused by negligence is a manslaughter. ID theft is an abuse, mainly psychological.

    I don’t believe in ”communism”, but a little control from elected government is a responsible way to protect its electors ;)

  9. ibanix says:

    What the hell? Since when is a company stepping up to offer services that are not provided by our gov’t a bad thing?

    This article is written with bias, and is wrong in material facts:

    “For $12.95 per month, TrustedID places alerts and freezes on credit files. The credit reporting agencies recently began allowing consumers to request credit freezes for free – but they only last 90 days.”

    Yes, and TrustedID keeps re-filing those for you, every 90 days, forever. They also include credit card number monitoring (if your credit card shows up on a website somewhere you are notified).

    I’ve had TrustedID for about a year now and I’m happy with it. Last month I applied for in-store credit when buying furniture. The issuing credit company called my cellphone while I was in the store, and asked me identity and security questions, to verify I really was applying for credit! Well worth the money spent.

  10. aikoto says:

    All crap. It’s sick that an entire industry has grown around attacking the symptoms and not the problem. Nearly all instances of ID theft can be stopped cold by placing a credit freeze on your credit reports.

    No monthly fees or stupid services required.

    Link for details:
    [www.jeremyduffy.com]

  11. doctor_cos wants you to remain calm says:

    @aikoto: There’s money to be made by treating the symptoms and leaving the root cause alone, look at the pharmaceutical industry and allergy medication (antihistamines vs. histamine blockers), this is HUGE money for them.
    Same principle here with credit, also with energy and a slew of other examples.
    In your Free Marketâ„¢ if there’s a penny to be squeezed out of some poor hapless consumer, there will be leeches lined up to get it, with the gubbamint smiling in the background.

    Maybe we should turn to binding arbitration? I seem to recall that worked for…

  12. aikoto says:

    @Doctor_cos: Yup. Those bastids.

  13. CumaeanSibyl says:

    @ibanix: So wait, you’re paying $12.95 a month for someone to do something, every 3 months, that you could do yourself for free?

    I have got to get into this industry.

  14. Trai_Dep says:

    @ibanix: So does TrustedID offer free water where you work, or do they make you bring your own bottle?

    Be point being, of course (besides: shill!), the agencies should protect our data correctly the first time, rather than be so haphazard with it that we need to spend an additional $100/yr to avoid being sodomized by them.

  15. TechnoDestructo says:

    @trai_dep:

    This is an example of the Free Market fixing problems (at added cost) that the Free Market created.

    Except that if it really were a Free Market there would probably be better solutions by now.

  16. WraithSama says:

    “CEO Todd Davis promoted his company’s services by bandying his social security number about the internet, challenging anyone to defeat his company’s software; a scammer successfully pried $500 from a check-cashing firm using his identity.”

    Freaking hilarious. I wondered if he was being serious in the commercials about that being his actual SSN. I don’t feel bad for him, the twit.

  17. misslisa says:

    Todd Davis of Lifelock lives in my community. Recently I had to attend a court-ordered anger management class for beating some guy’s ass in a bar. Davis sat next to me in the class; he was court-ordered to be there for an altercation with his wife. Unlike me, who only had to pay a fine, he was actually arrested & jailed by the Chandler, AZ police. Nice!

  18. rhombopteryx says:

    @ibanix:

    “What the hell? Since when is a company stepping up to offer services that are not provided by our gov’t a bad thing?”

    I don’t know that it is. I think everyone’s point is that either 1)these are companies charging you good money in return for nothing/and/or for something that’s free, or 2) but for crappy practices by credit reporting agencies, these services wouldn’t be necessary in the first place. On the whole these are parasite companies charging you extra to either do something useless (place fraud alerts that are almost universally ignored) or (in the case of freezes) already free. Worse, they wouldn’t be necessary if there wasn’t a significant, open festering security risk caused by the current industry and its practices. People resent these business models because they are more like “protection money” rackets than actual insurance.