As the problem of identity theft continues to grow, cottage industries will continue to sprout up around it, seeking to capitalize on people's fear, but also on the money companies throw around to make it look like they're doing something about their data leaks. This money isn't typically spent on actual solutions, but rather pointless and unhelpful gestures
like paying for a year of credit monitoring for those affected. With so much money on the proverbial table, plenty of companies are coming up with things that supposedly either prevent identity theft, or mitigate it effects -- even though many may have the opposite effect
. One company, LifeLock, charges users $10 per month for a bunch of services they could do on their own for free, and promises that if their identity gets stolen, it will spend up to $1 million to "make it right". In addition to the $10 per month, users have to hand over a boatload of personal information -- so you'd imagine that discovering one of the company's founders has a pretty questionable past
, including allegations that he stole this sort of information from customers of another company he owned, might not be so good for business.
As if that black mark wasn't enough, the company's CEO was also recently a victim of identity theft, despite the use of the company's services. The CEO supposedly has enough confidence in LifeLock's services that he pastes his Social Security number on its web site and advertising, but some fraudster used it to obtain a $500 loan from a check-cashing joint a few weeks ago. A company spokesman calls the incident a "loophole" because the check-cashing company didn't run a credit check on the SSN before issuing the loan, so the fraud alerts LifeLock put in place weren't tripped. The spokesman says the company tells people that "you can't stop every form of identity theft," but given this apparent shortcoming of LifeLock, as well as the shady past of one of it's founders, it's hard to put much faith in it at all.