Personal Finance

Did Credit Sesame Just Make LifeLock Obsolete?

identity theft protection lifelock credit sesame
Earlier this month, Credit Sesame launched a free identity theft protection service. In doing so, they were able to accomplish a couple of things. First, they were able to differentiate themselves from competitors like Credit Karma and Quizzle, both of which have no plans to offer free identity theft protection. Secondly, and something which isn’t quite as apparent since they have not been a direct competitor in the past, Credit Sesame may have made Life Lock obsolete.

This move to offer no-cost ID theft protection puts LifeLock in a difficult position. Their complete business money-generating model is to get people to sign-up for ID theft protection on a monthly basis. This was fairly easy to do because there wasn’t any alternative out there for consumers. The introduction of the free identity theft protection has completely changed that. If a consumer is worried about identity theft and wants to get this type of protection, they now have a choice of paying $120 a year or getting it for free. Which one do you think the majority of consumers are going to choose?

The second problem is that LifeLock can’t really match the offer. Credit Sesame’s entire monetization strategy is to offer consumers free access to different areas of their credit, and then offer them a variety of credit tools from third parties which can help them save money. LifeLock has no such strategy in place. If they try to match what Credit Sesame has done, they directly undermine their entire revenue strategy.

The question becomes, how much of an game changer is free identity theft protection? Credit Sesame’s CEO, Adrian Nazari, believes that introducing this to consumers will be extremely disruptive to companies like LifeLock.

In a recent phone interview, Nazari said, “I think free ID theft protection is a game changer. A good analogy would be early access to the Internet. At first, consumers had to pay for Internet by the minute. A revolution took place when newer companies began to offer it on a monthly subscription basis which disrupted everything for the established Internet providers. Offering free ID theft protection instead of the standard pay-a-monthly-fee model has the potential to disrupt the ID protection industry in the same way.”

Nazari sees that his company’s new offer will appeal to the vast majority consumers. As he said, “We are offering a basic service for free that will satisfy the needs of most consumers. Sure, some will want something better. They will want a Cadillac instead of a Chevy, but that Chevy is going to be fine for most consumers. And if they want a Cadillac, we offer that too.”

The Cadillac that Nazari was referring to was the difference between the no-cost ID theft protection, which offers $50,000 in protection, and a premium identity theft protection which offers $1 million in protection, but comes with a $10 a month fee. Currently, LifeLock only offers a premium ID theft protection service, with no free ID theft protection service available. An e-mail for comment about whether or not LifeLock would be offering a no-cost service in the future went unanswered.

It’s important to point out that, despite its name, ID theft protection can’t stop identity theft from occurring. This is why you shouldn’t pay someone to protect your identity. ID theft protection can possibly help detect identity theft more quickly than if you weren’t keeping track of your credit closely on your own, and it can help you with the steps to solve the issues that come with identity theft after it has taken place. In the end, however, you’re the one that needs to take the measures that will reduce the chance of it happening.

(Photo courtesy of West Midlands Police)

10 thoughts on “Did Credit Sesame Just Make LifeLock Obsolete?

  1. Based on what credit sesame is offering in their free service, it can’t compare to what LifeLock is offering. They give credit monitoring (which is very different, as it doesn’t alert until something hits your credit report)and the $50,000 in protection leaves the consumer to handle things themselves & just receive advice on what to do. In my opinion, this is no game changer.

  2. I think the only way for LifeLock to compete will be to change what they actually cover. At the moment all identity theft insurance covers is expenses that are incurred when you restore your identity.

    If LifeLock changed their policy to include funds stolen due to identity theft they’d differentiate their product enough to still be relevant. The downside is that offering that type of insurance is extremely expensive.

  3. There’s no difference that I can see between the two except the amount of coverage and Credit Sesame will walk your through how restore everything after identity theft while Lifelock will do it all for you. I don’t see how either company would ever pay out more than $50k since neither covers direct losses, but only costs in restoring your credit. $120 a year is a lot to pay for something that you can do on your own and probably will never have to use.

  4. This free service from Credit Sesame is nothing like LifeLock; not even their cheaper level of protection.

  5. Wow, Credit Sesame just changed the game here. Their free ID Protection is better than LifeLock’s $10 because it includes a credit score and credit monitoring and the Credit Sesame $10/month plan is on par with LifeLock’s $25/month plan. LifeLock is definitely in trouble.

  6. I spent over 10 months and nearly 100 hours on the phone with the idiots at the credit card companies and collection agency constantly repeating all the info to different people each time. That is weeks of my life i will never get back! I agree probably never use but trying to get it removed and not taken to court…I dont ever want to do again.

  7. Wait I just looked at Credit Sesame video and it seems like it only looks for ways to get you more credit! I am proud to be debt free and don’t want lower credit card rates. It is nothing like LifeLOCK! You get what you pay or dont pay for.

  8. The main difference here is that credit sesame is credit monitoring meaning they’ll only alert you once something is on your credit report which is normally 30-45 days after it happens, lifelock alerts in near real time. Thats HUGE, who wants to be told 30-45 days after their credit is ruined when you can be told before it gets ruined.

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