Identity-theft services face legal testTo learn more about Identity Theft and what to do if you are a victim, visit www.StopIdTheftCrime.com and subscribe to the newsletter to obtain your free 46 page eBook "Fighting Back Against Identity Theft".
Suit targets claims by rival of local start-up
By Hiawatha BrayIdentityTruth Inc. of Waltham says it will reimburse customers up to $2 million if they're victims of identity theft. But a Phoenix lawyer says the identity-protection company's promise isn't worth nearly that much.
IdentityTruth charges $10 a month or $100 a year to insure people against unauthorized use of their personal information. The privately held company is funded with about $20 million in venture capital from investors that include Argonaut Ventures and Stata Venture Partners. It's one of a host of companies that say they protect consumers from identity theft crimes, which cost Americans $49 billion last year, according to Javelin Strategy & Research Corp.
IdentityTruth posts fraud alerts with credit reporting agencies on behalf of its customers. These alerts warn banks and other businesses not to open new accounts unless they confirm the identity of the customer. In addition, IdentityTruth scours the Internet and a host of private and government-run databases, looking for evidence that somebody out there is pretending to be you. The company doesn't actually pre vent identity theft; it's designed to warn you immediately when a theft occurs.
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The IdentityTruth website states, "if you are a member of our service and are a victim of identity theft resulting in the loss of your money, we will reimburse you up to $2 million."
But Rob Carey of the law firm Hagens Berman Sobol Shapiro in Phoenix said the fine print of the IdentityTruth guarantee belies this assertion. Carey recently filed a lawsuit in the US District Court of Arizona against a rival service, LifeLock Inc. of Tempe. The suit, which seeks class-action status, claims LifeLock's $1 million guarantee is fraudulent because it contains loopholes that make it far less generous. Carey said the same loopholes are present in the IdentityTruth guarantee......
....In addition, the IdentityTruth guarantee excludes coverage of "consequential damages." According to Carey, that would include any debts incurred by an identity thief....
....Asked why the guarantee doesn't cover debts incurred by identity thieves, he replied, "The reality is that most of the money that would be lost here would be covered by the person's bank." (Full text at www.boston.com)
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