The Double A Lounge

Your credit profile is one of those things that everyone has but few fully understand. One thing everyone can understand is that it could be used by someone else for their own benefit. Well, don’t we have things to protect us against such things from happening? We do…sort of. There are ways of locking down your credit report or thwarting credit offers. Since identity theft is now a bigger problem, that means that someone is going to get the idea of turning that into some sort of service that makes people feel safer about it. Enter LifeLock, a company that does just that. They advertise pretty heavily now as evidenced by this video. They aren’t the only ones that do this, but they claim that they can watch over your credit and assist you with repairing if something goes wrong for as little as $10/month. Sounds like a great deal, right? Well, the old saying holds true – if it sound too good to be true, etc. In this case, I suspect it could be a case where people would use this service out of some unfounded fears and misconceptions.

As this article from Wired shows, what would seem to be good for consumers is already being lobbied against by credit bureaus and financial institutions.

This service pisses off the credit bureaus and their financial
customers. The reason lenders don’t routinely verify your identity
before issuing you credit is that it takes time, costs money and is one
more hurdle between you and another credit card. (Buy, buy, buy – it’s
the American way.) So in the eyes of credit bureaus, LifeLock’s
customers are inferior goods; selling their data isn’t as valuable.
LifeLock also opts its customers out of pre-approved credit card
offers, further making them less valuable in the eyes of credit bureaus.

So LifeLock essentially does something for you that you could do yourself. You would need to contact the major credit bureaus every 90 days to have a fraud alert put on your credit report. It’s already been clearly established that the last thing the credit bureaus want is something imposed on them that makes your credit report less valuable to financial institutions.

In reality, forcing lenders to verify identity before issuing credit is exactly the sort of thing we need to do
to fight identity theft. Basically, there are two ways to deal with
identity theft: Make personal information harder to steal, and make
stolen personal information harder to use. We all know the former
doesn’t work, so that leaves the latter. If Congress wanted to solve
the problem for real, one of the things it would do is make fraud
alerts permanent for everybody. But the credit industry’s lobbyists
would never allow that.

So because people who benefit from our credit info would lose money, we have to always be watching over our backs or pay the $120 per year to LifeLock or someone similar.

I have only one thing to say about that – no deal!

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