LifeLock Service Ruled ‘Illegal’
A US District Judge ruled in 2009 that LifeLock was illegally placing fraud alerts on its customers’ credit reports. Judge Andrew Guildford ruled that while the Fair Credit Reporting Act allows fraud alerts to be placed by individuals, it does not allow companies to do so.
“Experian argues that by using the term ‘consumer’ rather than ‘person,’ Congress expressly excused Experian and other credit reporting agencies from placing fraud alerts requested b companies like LifeLock. The court finds that this is a proper interpretation of the plain meaning of the statute,” the judge said.
Experian’s main complaint was that it was doing the work for LifeLock – since it was placing the alerts.
No matter who places the alert, what a fraud alert does is prevent anyone other than the consumer from using that consumer’s information. At the time of the suit, LifeLock had requested more than 1.5 million fraud alerts. Experian, along with the other credit bureaus, said this created a huge amount of work for them.
The ruling had huge ramifications for LifeLock and other companies who charge for this type of service. A fraud alert keeps your personal information from being used by anyone but you, but does nothing to protect credit you already have or your bank accounts. It also won’t prevent someone from obtaining a driver’s license in your name.
There are also class action lawsuits against LifeLock from former customers who claim the $1 million guarantee is worthless. The guarantee clearly states that a customer is covered only if the identity theft happens due to a failure of its service.
The good thing that came out of all of this is that LifeLock, as well as other identity theft protection companies, have stopped focusing on fraud alerts so much and are instead focusing on credit monitoring.
August 31st, 2009 at 12:54 am
Hey, there is nothing wrong with the service Lifelock was providing. Most of us know that you can do this yourself with each respective credit company. However, if you have ever dealt with any of these GD credit companies, you know it is like pulling teeth to communicate with them at all let alone set your own alerts.
I for one, thought this was a cheap conveniant way to set the fraud alerts to all 3 credit companies.
Lifelock simply provided a service.
What are we left with now? We are back to 3 or more credit companies who continue to make managing ones credit more cumbersome/troublesome then any other financial task in our personal lives.
THE CREDIT COMPANIES SUCK.