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identity theft protection

Why You Don’t Need LifeLock Identity Theft Protection

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Why you don't need to pay for LifeLock identity theft protection
Many people worry their identity may be stolen at some point in their life. With the constant credit card breaches from major retailers constantly in the news, the risk has become even scarier to most people. However, is it really worth spending money you don’t have to in order to protect yourself from identity theft with companies like LifeLock? Most experts are now saying that it isn’t worth paying for identity theft protection. And here’s why.

You don’t have to purchase costly identity theft protection from companies like LifeLock because you are already protected. Most people don’t bother to learn that. Federal consumer freedoms, creditors who monitor your scrupulously, and the steps you can personally take are already available and in place to protect you for free. That alone provides you with enough identity theft protection than you would get from paying for a service.

Many companies that offer identity theft protection have a tendency to overstate just how much identity theft actually occurs. While the percentage of people who have their identity stolen has increased, it is not so astronomical that most people will have their identities stolen. Companies exaggerate the numbers for one reason and one reason alone, they want to get you, the consumer, to purchase their identity protection programs. Even when people use these companies, identity theft can still occur. In fact, what they are actually offering is a service to help you restore your identity after it has been stolen. There is nothing they can do to actually stop it from happening. So why pay a fee for a service that isn’t 100% effective?

Credit card issuers customarily work on the side of the victim in the case of stolen credit cards. They understand that this can and does happen. If you report your card stolen within a specific period of time (as stated by your credit card company), you should have no problems in undoing any charges that you did not authorize. Credit card companies are generally efficient at detecting unusual and suspicious activity on your card and will immediately call you to make you aware of the charge. Sometimes they are so good at this that they may suggest suspicious activity even when it was you who purchased the item or service and your card was in fact not stolen.

If you are interested in having identity theft protection, you can research and find more cost efficient and possibly even free companies to monitor your identity. Look around online and find out what these companies are offering you. Compare the rates and fees they are charging based on the level of protection they provide. You will quickly learn that most of the more expensive companies are not worth the money.

The best person to prevent you from have your identity stolen is yourself. You have the ability to keep track of your financial information. Monitor all of your accounts online on a regular basis and as often as you can. That way, if you do find a discrepancy, you can take care of it right away. If you have a lost credit card or social security card, make the responsible choice and contact the right departments to put a hold on your credit.

Another way to prevent identity theft is to limit the amount of personal information you provide on the Internet. Don’t reveal too much about yourself to websites. Don’t just give out personal financial information without knowing exactly who you are dealing with. Purchase from verified and trusted online websites. Be mindful of those websites that ask you for your social security number. Why are they asking for it? Do they absolutely need it? Do not provide any personal information without researching the company and website first, if you are unsure about its safety. Trust yourself and you will have a very low chance of having your identity stolen.

(Photo courtesy of David Goehring)

Six Reasons to Like Credit Karma, Quizzle and Credit Sesame

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Reasons to like Credit Karma, Credit Sesame and Quizzle
If you want to find out your credit score these days, it’s a lot easier than it was even a few years ago. With sites like Credit Karma, Quizzle and Credit Sesame, you can find out your credit score by simply signing up with their website. This is important because your credit score can save you money in a number of ways, many of which you may not have ever considered. Below are five reasons to like Credit Karma, Credit Sesame, Quizzle, and other sites like them.

It’s Truly Free

It wasn’t too long ago when it was impossible to find out your credit score at no cost unless you paid money or jumped through a lot of hoops. If you didn’t want to pay to see it, you had to give your credit card and sign up for a one-month trial of a credit monitoring service. It was the introduction of Credit Karma and other sites like it where you could find out your credit score at no cost and without having to give a credit card.

More Than a Credit Score

While all these sites started off by offering no-cost credit scores, they have expanded to offer other information as well. Credit Karma and Quizzle both offer free credit reports while Credit Sesame offers free identity theft protection. You get even more financial information than you thought you were going to get.

Credit Education

Credit Karma and sites like it do more than just give you your credit score. In addition, they have a number of tools and information which can help you better understand your credit score, and how the financial decisions you make affect it. By better understanding how the financial decisions you make do affect your credit score, you’re in a position to be in control of it, and to build the score to your advantage.

Frequency

The free credit score sites allow you to view your credit score and credit report on a regular basis, rather than just every once in a while. For those who are in the process of trying to rebuild their credit, this allows them to see the incremental changes that come with the financial decisions that they make, and how these decisions affect their score over time.

Credit Goals

If you’re trying to improve your scores, the site can help you view and maintain your credit goals. Improving your credit score isn’t a one time thing that magically makes it improve. In order to improve the score, you have to make changes in how you handle your finances as compared to what you were doing before. These sites can help you find a credit score goal, and help you work toward that goal until you achieve it.

It’s Easy

For those who are curious where their credit score stands, these sites are an easy way to find out what that score is. You simply need to sign up with the service, and you can find out what your current credit score is right away. Then if you want to see if it has changed at any point in time, you simply need to log back into the site to find out what your current credit score is. It’s a convenient way to find out your current score without having to pay money to do it.

LifeLock Junior Child Identity Theft Protection Review

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LifeLock Junior review child identity theft protection
We have noted that LifeLock isn’t a scam, but it’s also something you really don’t need. The problem with all identity theft protection plans is they can’t actually protect your identity from being stolen. All they can do is help you resolve the damage once it has been done, so their name and what they purport to do is a bit misleading if you don’t do your research to find out exactly what you’re getting. On the other hand, there are steps that you can take on your own at no cost to greatly minimize the chance that your identity gets stolen. This is even more apparent in another service that the company promotes: their LifeLock Junior child identity theft service.

What LifeLock Says

The company claims that you need to protect your children from identity thieves, and should be worried about this happening, because identity thieves view children as a “gold mine” since their credit is clean and unmonitored. Even worse, this type of identity theft can go undetected for years.

In response, they offer the following benefits for the cost of $8.99 a month:

  • Identity threat alerts and detection
  • Verification of credit files
  • Surveillance of black market websites
  • Searches of file-sharing networks
  • 24/7/365 member service
  • $1 million in identity theft protection

Nothing Special

The Junior edition of their system seems to be nothing more than a marketing ploy. Although they market this protection specifically toward your child, closer inspection shows all they’re offering is the same service that they offer to adults as part of their regular identity theft protection. What they’re really doing is playing on parents’ fear and emotions of not being a good parent. In fact, there’s no actual LifeLock Junior plan for your child to sign-up for. It’s impossible to only choose to get identity theft protection for your child. The only way that you can receive it is as an addition to your protection if you join LifeLock as their parent, so that you would also need to pay $110 a year, which almost doubles your costs.

Not Likely to Happen

The truth is that it’s much less s likely for your child to get their identity stolen than an adult. This is because kids don’t have a lot of sensitive financial information about themselves floating around where it can be stolen. In fact, many children who have this happen to them have their identity stolen from a parent or close relative who have access to their social security number. That being said, it does happen.

You Can Do Better for a Lot Less

Here’s the thing. You can actually get better protection for your child for a lot less cost. All you have to do is put a credit freeze on your child’s credit with the three credit bureaus, and you’ll be doing more to protect your child’s identity than LifeLock can do. For those who haven’t had any identity theft take place, the cost ranges from no cost to $10 depending on the state to place a freeze on their social security number.

Your child shouldn’t be taking out any type of credit on their own before their teenage years. It’s as simple as that. LifeLock will alert you if someone applies to get loans with your child’s social security number, but this is notifying you after the fact. Placing a credit freeze on your child’s social security number with the three credit bureaus means that nobody can open any type of credit account without your permission, stopping them before they even have a chance to ruin your child’s credit.

Free Alternative

If you still feel the need for identity theft protection and insurance even after placing a credit freeze on your child’s social security number, you don’t have to pay LifeLock to get it. Credit Sesame now offers $300,000 in identity theft protection for free. The main difference is that Credit Sesame with have staff help walk you through restoring your child’s identity rather than doing it for you. You can also do this on your own using the step by step instructions given by the Federal Trade Commission (FTC)

Final Thoughts

Does your child need identity theft protection? Probably not, but to be on the safe side, simply put a credit freeze on their social security number so that nobody can take out any type of credit without you knowing and your approval. This is truly the best way to protect them, and you do it at much less cost to yourself. When your child gets older, you can take off the credit freeze and they can begin to build their credit on their own without any surprise that someone had stolen their identity years before.

(Photo courtesy of thejbird)

Credit Karma Has No Plans to Offer Free Identity Theft Protection

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Credit Karma free identity theft protection
Credit Sesame made the big announcement that they now offer free identity theft protection to consumers without the need of a credit card. It’s big news in the free credit score business, as this instantly differentiates them from their competitors like Credit Karma and Quizzle.

I reached out to Credit Karma to see if they were planning to offer a similar service to their customers. They replied that identity theft protection was not a service that they were planning to offer. In their own words, “We don’t have that on the roadmap right now, but we’ve always got something brewing. Stay tuned!!”

Credit Karma has recently taken hits on several sides. Credit card companies like Discover have instantly become a new competitor by moving into their core business of offering free credit scores to consumers. They had to settle with the Federal Trade Commission (FTC) over their unsecure mobile app, which could have allowed hackers to obtain sensitive financial information such as credit card & report details, birth dates, customer’s names, credit scores, email & home addresses, phone numbers, passwords and Social Security numbers. Now one of their main competitors is offering a new, free service that they have no plans to also offer.

The entire free credit score business has seen dramatic changes in the last six months, with more changes to come as new players move into the space, and those already in it attempt to stay relevant. Credit Karma choosing not to offer no-cost identity theft protection and insurance gives one of their competitors an easy and effective way to differentiate themselves by offering something more.

Adrian Nazari, CEO at Credit Sesame, says that this latest free offer allows their customers to complete the the final piece of the equation when it comes to their credit information by allowing them to protect it. “Credit Sesame customers can now access, analyze, monitor and protect their credit all in one place and at no cost with our service,” he said.

The free service gives those who sign up $50,000 worth of identity theft insurance. The insurance doesn’t cover actual money or valuables lost to identity theft, but covers the costs associated with clearing up the mess that identity theft can cause. This includes, but isn’t limited to, the following expenses:

  • Lost wages
  • Mailing costs
  • Notary costs
  • Obtaining credit report costs
  • Phone costs

Those who are already signed up with Credit Sesame and have opted in for their free credit monitoring service have automatically been enrolled into the identity theft protection service.

It’s important to remember that identity theft protection won’t be able to protect you from actual identity theft. It may be able to help you spot identity theft taking place earlier than you might have discovered it on your own, and it’ll give you some support while you go through the process of trying to clean up the mess that identity theft does to your finances.

For this reason, it’s vital to take simple steps that can help prevent identity theft happening in the first place. These steps won’t guarantee that it won’t happen to you, but it will make the likelihood of it happening much less.

(Photo courtesy of B Rosen)

Credit Sesame to Offer Free Identity Theft Protection

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Credit Sesame free identity theft protection
Credit Sesame is planning to launch a no cost identity theft protection service later this month. Best known for offering free credit scores, this is a move that makes sense with the increasing competition in the free credit score market. Credit card companies like Discover have recently begun to offer free credit scores to all their customers which can be seen as a direct threat to companies like Credit Sesame.

In making the move, Credit Sesame says that it hopes to be able to offer its customers a full 360 degree view of their finances by being the first to offer credit management, credit reporting and identity theft protection all rolled together to any consumer. They are hoping to ultimately be “Credit Karma, Bankrate and LifeLock all rolled up into one place.”

To show that there is a need for this free service, they note that according to the US Department of Justice, there were over 11 million Americans that were victims of identity theft and fraud in 2013. This ended up costing consumers some $21 billion in financial loss during the year, an increase of $8 billion from 2010. The Federal Trade Commission (FTC) also has identity theft as the number one complaint from consumers in 2013, accounting for 14% of the total complaints they received.

The specific details of this new identity theft protection service have not yet been released, so exactly how it will work is still unknown. Since they mentioned that they want to be considered like LifeLock, one would assume that the service will be similar, but not cost a monthly fee as LifeLock does. All Clear ID currently offers free basic identity theft protection (and an upgraded service for a monthly fee), but it’s much smaller that Credit Sesame.

With its current base of users who have already signed up to get free credit scores, this move will instantly propel Credit Sesame into being the leading website offering free identity theft protection. Offering this new service will also help differentiate itself from its three main no-cost credit score rivals: Credit Karma, Quizzle and Credit.com.

It could also prove to be an instant rival to LifeLock. Services like Credit Sesame found fertile ground to grow because the websites that offered free credit scores before them required users to give their credit card and were enrolled in a “free” credit monitoring service for a month. When that first month ended, the credit card would be charged a monthly fee for the service which upset many consumers. Credit Sesame and others began to offer free credit scores with no credit card needed, which completely uprooted the financial model of the other services. This could be the same case for the current identity theft monitoring services. Why pay $10 a month for this service if you can get the same service at no cost?

The ultimate flaw with all these identity theft monitoring services is that they can’t prevent identity theft in the first place. They can only alert you, in possibly a speedier manner, than you would have known if you didn’t have it. In the end, the best way to prevent identity theft is to be diligent on the front end so that it doesn’t happen in the first place. This is why we have always recommended never to pay someone to protect your identity. Now that a free service will soon be available, you can choose to have someone do it for free while you take the steps to prevent it from occurring in the first place.

(Photo courtesy of Don Hankins)

Dave Ramsey Financial Peace University Review: Week 7

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Image result for financial pictures
Credits to Office of Finance

Class this week was about insurance. You could hear the groans and sighs around the auditorium. Insurance is boring and it isn’t fun. Plus, I think people don’t like to talk about it because it means thinking about your mortality (in the case of life insurance), catastrophe (home and auto insurance), illness (health, long term care, and disability insurance), and all the ways you could be sued (umbrella insurance). None of these are fun topics and most people shy away from them as long as possible. Which is part of the problem.

Dave points out that insurance is every bit as vital to your financial well being as having emergency funds and being debt free. It does you no good to be debt free and have a year’s worth of expenses in the bank if you cause a car accident and get sued for five million dollars. All your hard work to get to that point was for nothing because you will be completely wiped out. The same will happen if you get very ill without health insurance, if your home burns down or is severely damaged without homeowners insurance, or if you become disabled and can’t work but don’t have disability insurance.

Dave talked about the seven main types of insurance that you should have: Homeowner’s/renters, auto, health, disability, long-term care, identity theft protection, and life insurance. The only one on that list that is debatable to me is identity theft protection. By law, if you are the victim of fraud you do not owe the money. You will not “lose” any money if you are the victim of ID theft and you don’t have insurance, unlike how much you will lose if your home burns down uninsured. Identity theft insurance does not pay you any money if you are defrauded. The only thing it does is to monitor your credit for early signs of trouble and (the good policies) provide a counselor to help you restore your good name. You can monitor your own credit and you can clean up the mess yourself for free, without insurance. Yes, it will take some time, but you can do it on your own. You buy insurance to cover big losses that you cannot afford on your own. I will not pay for ID theft insurance since there is no major monetary loss to me and I can handle the credit monitoring and restoration of my good name on my own. That is not the sort of thing that’s worth paying insurance premiums for. But, as I noted in an earlier piece, Dave has an insurer that he recommends, so I guess he had to get the pitch in.

Dave spends a good part of the lesson talking about why cash value life insurance is a bad idea. This is one of his pet peeves that I agree with. You should only buy term life insurance. Your goal in getting life insurance is to make certain that your family is provided for in the event of your death. Period. It’s not to invest your money and it’s not to get cash back at the end of the policy.

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Dave Ramsey Financial Peace University: Week One

Dave Ramsey Financial Peace University: Week Two

Dave Ramsey Financial Peace University: Week Three

Dave Ramsey Financial Peace University: Week Four

Dave Ramsey Financial Peace University: Week Five

Dave Ramsey Financial Peace University: Week Six

Dave Ramsey Financial Peace University: Week Seven

Dave Ramsey Financial Peace University: Week Eight

Dave Ramsey Financial Peace University: Week Nine

Dave Ramsey Financial Peace University: Week Ten

Your long term goal is to become self insured by having enough money to cover expenses, having enough saved for retirement, having no debt, and raising your family and sending the kids out into the world. Once those things are taken care of, you no longer need life insurance because if one of you dies, everything can be taken care of and paid for without that money. You carry life insurance to protect your family while the kids are young and while you’re building up that nest egg to take care of your old age. Thus, you carry it for a “term” of ten, twenty, or maybe thirty years, just to keep you covered until you can stand on your own. Because they aren’t permanent and have no investment component, term policies are much cheaper than whole life or cash back policies. Cash back policies are hugely expensive, almost never pay out the cash value, and deliver poor investment returns when compared to IRA’s or other investments.

You also don’t need life insurance on children because life insurance is designed to replace an income in the event of your death. As Dave says, “Children don’t make money, they use money.” If you child dies, it’s sad and it’s horrible but it isn’t going to affect the family’s finances, unless the kid is a superstar earning millions in Hollywood. If you must carry insurance on a child, only carry enough to cover burial expenses which, in most cases, can be added as a rider on your own life insurance policy.

Dave also talks about types of insurance not to buy, including credit card insurance, credit protection, cancer policies, accidental death, or mortgage life insurance. Many of these are covered with other policies (i.e., cancer is covered by health insurance) or are so expensive as to not be worth it. A good life insurance policy can go toward paying your mortgage or paying off any debts if you die, so paying for expensive extra coverages isn’t necessary. Just increase your life insurance amount to cover everything you want paid upon your death. Life insurance is much cheaper than specialty insurance policies. I’d put identity theft protection in this column, too, but Dave says it’s one of his essentials.

Before I move on to small group, here’s a side story: Coincidentally, this week’s lesson came just as our homeowner’s insurance renewal bill arrived in the mail. Last year our rate went up dramatically. Most of the increase was tied to the rebuilding cost. I didn’t think to question it too much, since we were just coming off the $5/gallon gas year where the costs of everything skyrocketed. I knew that building materials had also gone up because many are made from petroleum products. We were also coming off a year with a lot of hurricanes and other natural disasters and I know insurers get freaked out and raise rates whenever too much of that happens. Like I said, I didn’t like it but I didn’t think to question it too much. Fast forward a year. Our new bill arrives and it’s gone up even more. Way more. Now I’m mad. So I call around for quotes. I’m getting quoted rates that are about half of what we are paying. Now I’m curious. So I call my insurer and ask what’s up and tell them that we’ll have to cancel because I can get the same insurance elsewhere for much less. So the lady piddles around on the computer for a while and comes back to verify my information and my home’s relevant statistics.

“So, I show you live in a 2,100 square foot house.”

“Um, no. It’s 1,600 square feet.”

“You have an outbuilding, correct?”

“Um, no.”

“And you recently added a sunroom?”

“Um, no again.”

I don’t know what on earth happened at the insurance company, but somehow they had us living in the WRONG HOUSE. The address and everything was right, but whatever building they were thinking was on this lot is not on this lot. I don’t know whether they went to update their files and someone updated ours with someone else’s information, or if the computer somehow crossed things up but man, what a screw up. No wonder our insurance jumped sky high. She went back and discovered that everything had been correct up until last year. Then for reasons unknown it went haywire. They are still looking into it, but we will be getting back some money from last year, and our premium for the coming year will be about half of what they quoted us, or more in line with the other quotes I got. Moral of the story: If your insurance rates go up, always call for an explanation. You just might find that someone has screwed up massively and is insuring the wrong thing.

We spent a good deal of time in small group discussing the many ways insurance has saved people’s bacon. One man told of his home burning down. He was devastated, of course, but because they had good insurance they were able to rebuild and refurnish without having to cover any of it out of pocket. Certainly he regrets the loss of photos and family heirlooms, but he said that if he’d had to pay for any of the damage and loss, it would easily have run into the hundreds of thousands of dollars and created a hole he could never dig out of.

We also talked about how unwise it is, when you’re having financial trouble, to eliminate or reduce your insurance coverage. It’s tempting to save that money, but the potential losses are not worth any temporary savings you might gain. If you’re already having financial issues, an uncovered illness, car accident, fire, or injury could completely wipe you out. If you have some savings you might be able to consider reducing some insurance coverages, but even then you’re better off finding the money somewhere else in your budget. The things that insurance generally covers are major expenses. You don’t want to save a little bit of money (a couple of hundred) only to put yourself in a position where you could end up owing thousands or millions.

Each week in small group we’ve been invited to cut up any credit cards that we are no longer using. This week one of our members cut up twenty-eight cards! Everything from gas cards, to store cards, to major credit cards. It took quite a while and nearly filled up the jar they keep the pieces in. This couple has pledged to go card free, so this was every card they have. They didn’t keep one for emergencies or anything else. Twenty-eight cards. Aside from wondering how big of a wallet they needed to carry all that, I couldn’t help but wonder why they’d taken out so many. For the sign up bonuses and discounts? For the rewards? Or because they needed them to get through some tough times? They didn’t say and I’m left wondering. I wonder if a lot of people have this many cards, or is this an exception. Whatever the reason, I’m proud of them for cutting them up. I may not be willing to go card free in my own life, but twenty-eight cards is excessive and asking for trouble. I could tell that this couple felt a lot better and they will probably do quite well.

Homework Roundup: This week we were to fill out the insurance recap form. This form gives us a place to list all our insurance polices and the details of each. It also lets us see exactly where any gaps might be in our insurance coverage and gives us a place to record a date by which we intend to fill that gap. We have all of the policies Dave recommends and carry (mostly) more than his recommended limits, except an umbrella policy. I would like to get one at some point but I remain uncertain as to when that might be. I haven’t fully convinced myself of the necessity, so I need to do some more research before I commit.

We were also to make certain that our life insurance is at the level Dave recommends. Our life insurance is well below the ten times your salary that Dave recommends, but we are okay with that. We are no longer that young, we both work, we don’t have any kids, we have a lot in savings, and the house is paid for. We’re almost to the point where we are self-insured. If one of us were to die, the other one would be able to continue working and bring in enough money to support themselves. We keep the life insurance policy so that the money could be used if one of us needed to hire some outside help, or to simply buy some grieving time without having to rush back to work or tap the savings. However, if we had kids or were much younger, or had a lot of debt, we’d carry much more life insurance. I don’t think Dave’s estimate is necessarily wrong, but it’s not a blanket number that applies to everyone.

Lastly, if you can’t attend the course yourself, consider getting the Dave Ramsey Financial Peace University DVD Home Study Kit (9 Week Course) 2012 Release. It sells for under $200.00 on Amazon and you’ll have the luxury of learning at your own pace.

Next: Dave Ramsey Financial Peace University Review: Week Eight

This is a series of posts about what you will find in Dave Ramsey’s Financial Peace University course. You can find the previous posts here: week one — week two — week three — week four — week five — week six