It's not news to anyone in the tech industry that identity theft is one of the fastest-growing crimes. And it's getting even easier with all the information people voluntarily put out there about themselves on social-networking sites. Thus, it's no wonder that services such as LifeLock or IdentityGuard (or countless others like them) have risen to meet the challenge.
But this afternoon I found a story that serves as a sobering reminder on two different fronts - first for consumers, and then for service providers. Ars Technica reported this week that LifeLock has actually paid out $12 million for failing to make good on its advertising promise to make a customer's identification "theft proof."
Writer Jacqui Cheng says:
According to the [Federal Trade Commission], LifeLock has long claimed that it's the first company to prevent identity theft from ever occurring, that it will never happen to you if you become a paying customer, and that it can stop fraudulent activity before it happens. "Guaranteed." However, the company only employed limited protections on behalf of its users - LifeLock apparently only went so far as to place a credit alert on its customers' credit reports, says the FTC, and barely did anything else.
As a result, the FTC and 35 states filed charges against the company for false advertising on March 8. A day later, LifeLock agreed to pay the FTC $11 million, and the state attorneys general $1 million as well as to stop misrepresenting its services.
So, for the consumer, like your parents always said, "If something sounds to good to be true, it probably is." Don't buy into a service unless and until you've researched it enough to know it will be worth the money.
For service providers, no matter how tempting it may be to exaggerate in your ad campaigns, don't do it. The ultimate cost will most certainly outweigh any additional customers it may have gained you early on.