Lifelock Appeal Turned Down
Its the end of the road for Lifelock after a US District Judge turned down
their appeal on his ruling that the fraud alerts it places on behalf of its customers were illegal.
The fraud alerts are the center piece of the Lifelock identity theft prevention service. The problem for Lifelock is that they were designed for individuals to place on their own credit file should they have reason to believe they may be at risk from identity theft.
A lost wallet or missing post would be cause for concern. A quick phone call to one of the credit bureaus and for the next 90 days if anyone tries to take out a new line of credit, the company offering the credit have to show extra vigilance in confirming the person really is you. This is the sort of situation the Government envisaged when they came up with the idea of fraud alerts.
What Lifelock did was automate the process by hiring ‘home workers’ to place the fraud alerts on masse, over 100,000 times a month to me more accurate. They had over 1.5 million Americans sending them $10 a month to make a toll free phone call 4 times a year!
This placed enormous pressure on the system and cost Experian millions a year in extra work and equipment to try and cope with the growth of Lifelock.
Maybe if Lifelock had offered to share some of their ‘easily made profits’ with the company actually doing the work for them, Experian wouldn’t have spat the dummy out and seeked legal intervention.
Lifelock have had a checkered life. Built on seed money from investors which was used to set up aggressive marketing campaigns, they have several court cases still outstanding.
Their (in)famous guarantee is the center of several class actions thanks to the small print revealing they will only pay out the costs of correcting your credit file and not for replacing any money lost. It also states the guarantee only comes into play if the identity theft is a result of a ‘failure or defect of our services.’
As the only real service they provided (before the court ruling) was to ask Experian to place a fraud alert on your file, good luck proving your bank account has been emptied due to a Lifelock fault.
It was also discovered that the social number Todd Davis showed off as a way to prove his company worked, had in fact been used to illegally obtain at least 20 driving licenses in his name as well as someone using it to take out a payday loan.
