Lifelock Found To Be Illegally Placing Fraud Alerts On Credit Profiles
from the oops dept
There are all sorts of questions about Lifelock, the company that claims to help protect you from identify theft. There were the stories that the founders of the company had previously been involved in identity fraud operations. And, of course, there's the whole issue with the company's CEO becoming a victim of identity fraud, while out promoting the service, by happily displaying his social security number in ads. In response to this, rather than letting the police handle the situation, the CEO hunted down the guy who impersonated him with a camera crew and coerced a "confession" out of the guy. This basically ruined the police investigation and they gave up prosecuting the case, saying that the evidence was tainted. Oh yeah, and there's the matter of the class action lawsuit against the company from customers who realized that Lifelock doesn't do much to actually prevent identity theft.However, it's still surprising to find out that a court has ruled that Lifelock's fraud alert services are illegal. The lawsuit was brought by Experian, one of the big credit rating agencies, complaining that Lifelock abuses the fraud alert process. By law, the credit ratings agencies need to agree to put a free fraud alert on an account at the request of the account holder if they feel they're at risk of identity fraud. The alert requires anyone trying to open a new line of credit to first confirm with the customer before being able to extend the line of credit (basically, if someone tries to open a new credit card, the cardholder gets a call to make sure they really wanted it).
This is a free service, which lasts for 3 months -- at which point you need to proactively renew it. One of Lifelock's services is putting that alert on your accounts and promptly renewing it when the 3 months are up. Even though anyone can set their own up for free, for some people it's worth paying Lifelock to manage that process. Experian claimed it was an abuse, well beyond what the law was intended for, and that it was costing the company a ton of money to manage all of these requests. The judge agreed, noting that the lawmakers did not appear to intend for individuals to have middlemen place and manage fraud alerts.
While I'm somewhat skeptical of Lifelock, the idea that a company can't manage such alerts for an individual seems somewhat silly and counterproductive. The issue, though, probably isn't so much with the ruling, but with the law. Perhaps Congress should simply fix it and make it clear that if you want to pay some company to manage such alerts for you, that's perfectly fine.
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Filed Under: credit reports, fraud alert
Companies: experian, lifelock
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Lifelock
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Re: Lifelock
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Re: Re: Lifelock
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Re: Re: Lifelock
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Why only 3 Months
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Re: Why only 3 Months
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Unfortunately Lifelock didn't choose a very good business model. Shame for them really. Of course, this is a real opportunity for them: not only do they have a large customer base, but they also have this jolt of increased attention from the lawsuit. Surely they will be able to leverage this and choose a better business model going forward.
--END SARCASM
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Re:
God, you miss the entire point of this blog. When people here say that a company needs a new business model, it's because the company is demanding protection of its old business model. The company wants the government, courts, ISPs, and consumers to ignore reality and enforce its business model by making any reasonable alternatives illegal.
Here, Lifelock is not demanding such protection. In fact, the only company that did demand protection was Experian. Instead of following the law and providing the locks every three months, as the law requires, it ran to court to protect itself.
So not only was your sarcasm incorrect, it was completely wrong.
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Poor Credit Card Companies...
With that said, the problem is the that you can't have a fraud alert flag on your account for more than 3 months. All the reporting agencies have to do is extend this period and wham they have reduce their costs of responding to life lock's request and at the same time kicked them in the **** by making their business model/sales pitch less useful.
I hate Apple with a passion, but there are some that love it. If I'm in a business, I find a way to profit off those that use Apple. (Same story for the old days with AOL when it was the in-thing.) The Credit Card companies should realize the opporunity hear and the fact that someone is filling a niche - itstead of whining about the business filling the niche, do it yourself - after all it is your system and you should be able to have a better program than anyone.
Freedom
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No, they should REALLY fix the law
No, they should really fix the law and let individuals put permanent blocks on their records if that is what they want to do. The credit reporting agencies don't want this because it means they can't sell the data on a blocked account.
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Re: No, they should REALLY fix the law
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For me, it's worth it. (I have been notified that information had been stolen, which is why I'd signed up in the first place.)
Yes - I could, theoretically, go in and place those holds myself. But - I use online banking so that I don't have to remember to write out checks, that's the bank's job. Why shouldn't I be able to pay a company do this for me?
Yes - permanent blocks would be better - but that just ain't gonna happen and we all know it.
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Re:
Especially if you just roll over and accept it.
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that judge is an idiot
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It's all about the Benjamins -not consumers.
LifeLock isn't the only company offering the convenience of placing our fraud alerts every 90 days -yet they were the only company sued because they are big enough to affect Experian's profits. If Experian focused more on perfecting its procedures and less on its profits, LifeLock wouldn't be even a blip on their radar. Looks like they are the ones that need to be legislated into being responsible and accountable for this now #1 crime. Why is it TransUnion is working with LifeLock in placing fraud alerts and not against them? Looks like they are trying to work together to solve the real problem and not exacerbate it for profits! See Memo to Experian: Identity Theft is the problem, NOT your competitors! http://weblogs.sun-sentinel.com/news/opinion/theslant/blog/2009/05/xxxxxxx_1.html
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Why?
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re: Lifelock
The judge’s job is to respect, interpret and uphold the law. His ruling in Experian v. Lifelock did just that. In fact, the evidence was so clear and not in dispute on the claim, he issued a partial summary judgment. This means the THE CLAIM DID NOT EVEN NEED TO GO TO TRIAL. That’s how blatantly Lifelock violated the law.
The judge did his job; he upheld the law. If you don’t like it, work to get the law changed.
Now Lifelock, Debix TrustedID and similar companies are in trouble because Experian can file for injunctions to stop their illegal business practices (Debix already caved in and dumped their fraud alert product). After than comes damages. And there are still eight other claims in Experian v Lifelock that are on track to go to trial later this year.
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I'll bet that the company requesting the credit report doesn't have to pay Experian for the credit report or only pays a partial amount if there is a block on the customer's account, so blocked accounts cost Experian money.
With the pervasiveness of fraud and ID theft today, wouldn't it make sense that ALL credit files from the three agencies are, by default, blocked and the consumer has to request that it be unblocked?
Sorry, hate to muck up this discussion with common sense...
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Lifelock is a scam
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Re: Lifelock is a scam
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What makes you think the judge isn't just corrupt and fully knowing of what he's doing?
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What gives Experian the right
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LifeLock
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Opt Out Detectives
It's worth a quick look...
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Russian car in an Experian ad online?
http://img34.imageshack.us/img34/4858/ladains...
http://yfrog.com/0yladainsurancej
This is the direct link to the ad:
https://autoinsurance.lowermybills.com/formProcessing.iau?sourceid=46819170-223079181-35998619& ;jsEnabled=Y&resolution=1024x768&cookieEnabled=Y
or:
https://autoinsurance.lowermybills.com/
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ID Theft
ATTN: I have a problem with ANY company accepting a call from someone claiming to be I, without that company contacting I and confirming whether it's I or not.
Otherwise, it IS 'DECEPTIVE Practicing' and should be prosecuted as FRAUD, for the law says that "if a person even attempts to commit fraud, they should be prosecuted as if they actually committed fraud" and I TOTALLY agree, regardless of wht state is invloved, for whereever it's attempted, does NOT exempt a person for attempting to commit fraud.
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