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HSFPP Update # 232—Guaranteed Identity Theft Protection Service Does Not Live Up to its Ad Hype
Message from Bob: We all need to safeguard our personal information in order to reduce the likelihood that we will be victimized by identity thieves. However, think twice before paying for this protection. It might not be as good as advertised, and currently no company can honestly guarantee to protect your identity.
Note: The Facebook virus is now making the rounds again. I recently received an e-mail trying to get me to reset my Facebook password even though I do not have a Facebook account. Do not open any attachments from these e-mails because they contain a virus. For more detailed information, go to: http://www.snopes.com/computer/virus/facebook.asp.
Snopes.com first reported about this virus this past November, and now it’s back. See a new warning at: http://www.allfacebook.com/2010/03/facebook-password-reset/.
The same warning applies to any e-mail you get claiming to be from a financial institution or other business, saying your password has been changed, or they have detected a security violation on your account, or some similar message. These spam e-mails, which are not actually from the business they claim to be from, are known as “phishing” e-mails. They try to get you to reply with your sensitive, personal information, which can be used to steal your identity; or, like the Facebook e-mail, they try to get you to click on the link, so you will unwittingly download a virus or spyware onto your computer.
The company an e-mail appears to be from might often not be one you do business with; but spammers and phishers send the e-mails to many consumers at once, and they get a lot of responses that way. Don’t be a victim yourself!
Web Site Picks of the Week:
“Identity Theft: Kentucky Victim Kit” (Kentucky Attorney General’s Office)
The Identity Theft Resource Center
These Web sites provide great resources about identity theft for consumers and victims, including current laws, a reference library, news, and scam alerts.
Notes to Educators:
History / Social Studies class: Research the history of identity fraud in the U.S. and write a short essay on the subject. Include notes and bibliography. Use at least three sources, two of which must be from current magazines or newspapers (no more than one year old).
English class: Write a letter to your congressperson to help people who have had their identity stolen. Should you have to pay $30 to put a freeze on your credit record in order to stop anyone, including yourself, from opening new credit accounts under your name (and then pay again to unfreeze your account when you need credit to buy a car or to get a credit card)?
Detail the various positions involved with this issue and weigh the evidence. Identify a solution that you think your congressperson should pursue. The letter should be three pages, with notes and bibliography included separately. Use at least three sources: magazine and newspaper articles only; no encyclopedias may be used. At least two of your sources must be current (no more than one year old).
You don’t actually need to send the letter, but, after finding out how much trouble identity theft causes consumers, you might want to!
In the New$... As Identity Theft Increases, Should You Pay a Company to Protect Your Personal Information?
by Robert H. Flashman, Ph.D., State Specialist, University of Kentucky Cooperative Extension Service
The Federal Trade Commission (FTC) just released their list of the Top 10 consumer complaints of 2009, and identity theft once again topped the list. Many criminals realize how much easier it is to steal from consumers and businesses via identity theft; and how much less likely they are to get caught. Unfortunately, their crimes find many victims.
You don’t need to do anything wrong for it to happen, and you might not realize right away that anything has happened. Victims can spend years recovering. They may be turned down for credit, for housing, and for employment. Criminal identity theft is a special problem. Because the criminal commits crimes by pretending to be the victim, the victim may be arrested for crimes he or she did not commit. This is something we all want to avoid. As a result, many consumers have turned to companies like LifeLock, which had a well-known commercial guaranteeing 100% protection from identity theft. The company’s founder seemed so sure that LifeLock could prevent identity theft that he posted his Social Security Number on the side of a truck.
How Well Does It Work?
LifeLock, Inc. provides consumers protection against identity theft. However, what they provide is not complete protection. According to an FTC news release, LifeLock will pay $11 million to the FTC, which the FTC will use to provide refunds to customers. LifeLock will also pay $1 million to a group of 35 state attorneys general to settle charges that LifeLock used false claims to promote its identity theft protection services. According to the Federal Trade Commission, to get more customers, LifeLock claimed:
- “By now you’ve heard about individuals whose identities have been stolen by identity thieves . . . LifeLock protects against this ever happening to you. Guaranteed.”
- “Please know that we are the first company to prevent identity theft from occurring.”
- “Do you ever worry about identity theft? If so, it’s time you got to know LifeLock. We work to stop identity theft before it happens.”
Unfortunately, these claims were untrue. LifeLock gave no protection on existing accounts, medical identity theft, or employment identity theft, and they do not provide absolute protection. LifeLock also made claims about its own data security that were not true. According to the FTC, LifeLock collected information such as Social Security Numbers (SSNs) and credit card numbers, for which LifeLock claimed that:
- “Only authorized employees of LifeLock will have access to the data that you provide to us, and that access is granted only on a ‘need to know’ basis.”
- “All stored personal data is electronically encrypted.”
- “LifeLock uses highly secure physical, electronic, and managerial procedures to safeguard the confidentiality and security of the data you provide to us.”
These claims by LifeLock were also not true. In fact, those wanting to get customer information can get it. The FTC and state settlements with LifeLock will prohibit the company from misrepresenting the “means, methods, procedures, effects, effectiveness, coverage, or scope of any identity theft protection service” (FTC). The settlements also require LifeLock to establish a comprehensive data security program and obtain biennial independent third-party assessment of that program for twenty years (FTC).
What You Can Do
If your personal information gets where the wrong people can see it or someone steals your identity, there are things you can do to protect yourself. First, contact one of the three biggest credit reporting bureaus—Equifax, Experian, or TransUnion—to place a fraud alert on your credit record. You may instead do this by telling a consolidated credit report provider such as AnnualCreditReport.com. Contact them online at http://www.annualcreditreport.com, or call (877) 322-8228. When you notify one of the three major credit bureaus, they will then notify the other two.
You might find it hard to get through and tell them of your problems, however. The major credit bureaus will take your requests over the phone, but their phone systems can be hard for consumers to use. You might find it easier to place your request on the Web site of one of these companies or on AnnualCreditReport.com. But you might still need to mail them some information so they can access your file. Do this, even if it is difficult; if you do nothing, you will be far worse off.
(Those of you who are under Age 18 may need to ask your parent or legal guardian to place the fraud alert for you and/or request your credit record in writing, providing all information the credit reporting bureau or AnnualCreditReport.com requests on their Web site.)
If your personal information gets where the wrong people can see it, but you find no fraud on your credit report, you may place an alert on your record for 90 days. You can renew this alert every 90 days. You get a free credit report when you place this alert. If someone does steal your identity, you need to file a police report with your local police or with the police where the fraud took place. Close all accounts that might have been seen by the wrong person or that were opened against your wishes.
If you have a police report of actual fraud, you may place an alert for seven years. A new Kentucky law that took effect July 12, 2006, allows you to place a security freeze on your record. This will keep people from getting your credit report without your approval. It costs $10, but is free if you provide them a copy of your police report. Don’t place such a freeze on your record unless you need to do it, however; it will make it hard for you if you apply for credit yourself. But, if you need to buy something big like a car or home, you can lift the freeze temporarily for $10.
Dispute any bills that result from identity theft. Tell the Kentucky Attorney General’s Office about any companies that try to get you to pay those bills even after you write to them about what happened. Take action quickly, as soon as you see there is a problem, and continue to defend your identity as long as necessary. It isn’t easy, but it’s a lot better than doing nothing!
(1) Federal Trade Commission. (2010, March 9). LifeLock Will Pay $12 Million to Settle Charges by the FTC and 35 States That Identity Theft Prevention and Data Security Claims Were False. Retrieved March 22, 2010, from http://www.ftc.gov/opa/2010/03/lifelock.shtm.
Farrell, Claudia Bourne. (2010, March 10). LifeLock to Pay $12 Million in FTC Settlement. Dark Reading. Retrieved March 22, 2010, from http://www.darkreading.com/security/client/showArticle.jhtml?articleID=223400032.
(The article is the same from both sources. We had difficulty opening the article from the FTC Web site, so we are providing two links to ensure that you are able to access it.)
(2) University of Kentucky Cooperative Extension Service. (2006, January 30). HSFPP Update # 147: Identity Theft Revisited. Retrieved March 22, 2010, from http://www.ca.uky.edu/HES/fcs/HSFP/updates/2006/update0147.htm.
1.) What do you currently do to protect yourself from identity theft? Discuss ways that you protect yourself when on the Internet and at other times.
2.) In what ways do you think teenagers are most vulnerable to identity theft, and what can teens do to correct this?
3.) Should penalties for identity thieves be more severe?
4.) Right now, the burden is on the consumer to protect his/her identity and to recover from identity theft. Do you think the burden should be on the individual, who may not know what to do? Or should it be on the government or corporations? If so, how could the government or corporations adequately protect consumers’ identities?
Quiz: Consumers can test their knowledge about identity theft with the “ID Theft FaceOff” quiz at http://www.onguardonline.gov/games/id-theft-faceoff.aspx. Choose the appropriate faces/identities for your audience’s age and knowledge level.
Kentucky High School Financial Planning Program
The purpose of the HSFPP financial updates, video lessons, and Web site is to assist county Extension agents, credit union educators, high school teachers, and parents who home school their teenagers so that they may improve the economic well-being of our teenagers; and also to show educators how the HSFPP, updates, and video lessons meet Kentucky core concepts. The Web site, updates, and video lessons are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators. The list of core concepts and order form for free program materials including the student guide and instructors manual can be found on the Kentucky HSFPP home page.
If you are not already on our listserv:
The video lessons are available only to members of our listserv and will not be posted to the HSFPP Web site because of the timeliness of the information. If you would like to receive our video lessons, which are sent to our listserv biweekly, on alternate weeks from these updates, please sign up at the following page of our Web site: http://www.ca.uky.edu/HES/fcs/HSFP/response.htm.