Lifelock Service Ruled Illegal
A US District Judge has ruled that Lifelock are illegally placing fraud alerts on its customers credit reports.
Judge Andrew Guilford ruled that while the Fair Credit Reporting Act allowed fraud alerts to be placed by individuals, it did not allow companies to do so.
“Experian argues that by using the term ‘consumer’ rather than ‘person’ in (the FCRA), Congress expressly excused Experian and other credit reporting agencies from placing fraud alerts requested by companies like LifeLock.”
“The court finds that this is a proper interpretation of the plain meaning of the statute” the Judge said.
Experian filed the case against Lifelock as it’s extremely miffed at the fact that it is doing Lifelock’s work for them.
The only meaningful thing Lifelock do is a to place a fraud alert on a customers file. The fraud alert was designed to be used should you feel you are at a risk, lost your credit card, post keeps going missing etc.
Lifelock have so far requested fraud alerts for over 1.5 million customers and this is creating a huge amount of work for Experian and the other 2 credit bureaus, work Lifelock is happy to charge for but not pay for.
The ruling will have huge ramifications for LifeLock and other similar companies who have been using the loop hole which allows them to charge a customer for a service which is freely available at any of the 3 major credit bureaus.
Experian and the other credit bureaus are happy for you to place a fraud alert yourself but experts have warned for some time that their value is limited.
A fraud alert may warn you if a new line of credit is opened in your name, ie. someone signs to buy a new TV on credit or signs up for a new credit card offer but it does nothing to protect credit cards you already have or bank accounts being emptied of your savings.
Neither does it prevent someone using your name to obtain a driving license (there are at least 20 illegal licenses is circulation all in the name of Todd Davis and all obtained by using his social security number although he forgets to mention that in the Lifelock commercials).
Lifelock are also facing class action lawsuits from former customers who claim the 1 million guarantee is worthless.
The guarantee states a customer is covered only if an identity theft happens due to a failure of its service. As the only service Lifelock provide is to place a fraud alert, customers who end up being victims are unable to claim on the guarantee.
Most of Lifelock’s competitors announced they would be dropping the fraud alert service and concentrating on credit monitoring in light of the court ruling.
Lifelock CEO Todd Davis though said it would be ‘business as usual’ and with their current customers sending them a collective $10.5 Million each month they are sure to keep going as long as possible.
This is despite the fact new customers signing up will be unaware they are paying for a service Lifelock will soon be unable to deliver.
YES! One more nail in the coffin. I wonder what lifelock will do now since the first two bullet points on their “what we do” page is “set fraud alerts” and “set fraud alerts again when they expire”…
Also, I didn’t know Lifelock-scam.com existed. I will put a link to you guys from my site right now
[...] Lifelock was sued by Experian for placing fraud alerts for anyone and everyone when the alerts are supposed to be set by individuals themselves and only when they feel they are at risk for ID theft. While I think that whole system is a scam, I can’t help but snicker that the courts ruled that the practice is not legal. [...]
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.
Hi Jack
Setting your own fraud alert is done via an automated phone call and simply calls for entering a few numbers such as DOB via your phone keypad. By law you only have to do it with 1 credit bureau and they have to inform the other 2.
Takes 2 minutes tops and you speak to no one.
Hi admin,
Got a phone number to share to setup this fraud alert by phone?
Hi Chris
Use the links in the blogroll on the right to set up online or phone Experian on 1-888-397-3742.
The call is automated, you don’t actually talk to anyone. You will need your SS number, DOB etc. handy.
You only have to set your fraud alert up with one of the bureaus as by law the one used must inform the other two.