Earlier this week, LifeLock won an "ACE" award for being the fastest growing Arizona company. "ACE" stands for Arizona Corporate Excellence. LifeLock was selected based upon its actual dollar revenue growth as well as percentage revenue growth. The revenue growth for the past two years was used to justify awarding LifeLock with the ACE Award.
Guess there are a a lot of duped consumers in Arizona!
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Showing posts with label LifeLock. Show all posts
Showing posts with label LifeLock. Show all posts
September 23, 2009
September 17, 2009
LifeLock hires new Chief Marketing Officer
LifeLock, the scam of a company, has hired Marvin Davis as its new Chief Marketing Officer. Davis is the former Vice President of Verizon Wireless. That's fitting. I've sued Verizon a couple of times in identity theft cases. Verizon has this strange, baseless notion that it need not comply with 15 U.S.C. 1681s-2(b)'s duty to reasonably investigate disputes lodged by a consumer with a credit bureau regarding a Verizon account if the consumer previously did not provide something to Verizon that Verizon requested.
In my case, my client was the victim of a fraud account opened by Verizon. The identity thief used my client's name and SSN to apply for a phone. Verizon pulled my client's credit report but did not bother to actually look at it (according to sworn testimony). If it had, Verizon should have noticed that the birth date given by the perp was completely wrong and that my client lived in North Carolina, not Illinois where the account was being opened. Alas, less than 10 seconds after the application was submitted, the perp had his shiny new fraud account.
My client learned of the fraud when, of course, the identity thief did not pay the $1000 or so in charges racked up on the cell phone. Verizon then was able to look at my client's credit report, realize he was stationed in North Carolina, and start trying to collect from him there. My client was in the military and set to be deployed to Afghanistan a few days after he first learned of the fraud account.
When he called Verizon to dispute the account, Verizon requested copies of his SSN card, driver's license, and a police report. My client provided the SSN card and driver's license but could not provide a police report. His local North Carolina police would not take a report, since the crime occurred in Illinois. And the Peoria, Illinois police would only take a report in person which, being on the way to war, my client was not able to do. My client told Verizon all this and even provided a statement from his superior officer that he was in North Carolina and never in Illinois where the account was opened. Verizon refused to listen and took the stance of "no police report, no correction".
After repeated phone calls to Verizon from Afghanistan (and even being hung up on once by a rude Verizon employee), my client disputed the fraud account to the three credit bureaus. Each of these bureaus relayed his disputes to Verizon, which triggered Verizon's duty to investigate pursuant to 1681s-2(b). Keep in mind that this duty to investigate is triggered even if my client had never contacted Verizon directly. What did Verizon do in response to the credit bureau disputes? Nothing. Nada. Zip. Verizon claimed that it did not have to investigate because my client had never provided a police report which he was not physically able to do (short of holding a gun to a cop and forcing him to do a report) and, of course, is not even required by the FCRA. The law is clear. Verizon had a duty to investigate.
Three credit bureau disputes later and still no investigation or correction. Finally, after being denied a home loan due to the Verizon fraud account on his credit report, my client found me and we filed suit. The lawsuit triggered something that nothing else had ... removal of the fraud account. And a confidential settlement approximately a year later.
Based upon the above, I am sure Marvin Davis will fit right in with LifeLock's shenanigans.
In my case, my client was the victim of a fraud account opened by Verizon. The identity thief used my client's name and SSN to apply for a phone. Verizon pulled my client's credit report but did not bother to actually look at it (according to sworn testimony). If it had, Verizon should have noticed that the birth date given by the perp was completely wrong and that my client lived in North Carolina, not Illinois where the account was being opened. Alas, less than 10 seconds after the application was submitted, the perp had his shiny new fraud account.
My client learned of the fraud when, of course, the identity thief did not pay the $1000 or so in charges racked up on the cell phone. Verizon then was able to look at my client's credit report, realize he was stationed in North Carolina, and start trying to collect from him there. My client was in the military and set to be deployed to Afghanistan a few days after he first learned of the fraud account.
When he called Verizon to dispute the account, Verizon requested copies of his SSN card, driver's license, and a police report. My client provided the SSN card and driver's license but could not provide a police report. His local North Carolina police would not take a report, since the crime occurred in Illinois. And the Peoria, Illinois police would only take a report in person which, being on the way to war, my client was not able to do. My client told Verizon all this and even provided a statement from his superior officer that he was in North Carolina and never in Illinois where the account was opened. Verizon refused to listen and took the stance of "no police report, no correction".
After repeated phone calls to Verizon from Afghanistan (and even being hung up on once by a rude Verizon employee), my client disputed the fraud account to the three credit bureaus. Each of these bureaus relayed his disputes to Verizon, which triggered Verizon's duty to investigate pursuant to 1681s-2(b). Keep in mind that this duty to investigate is triggered even if my client had never contacted Verizon directly. What did Verizon do in response to the credit bureau disputes? Nothing. Nada. Zip. Verizon claimed that it did not have to investigate because my client had never provided a police report which he was not physically able to do (short of holding a gun to a cop and forcing him to do a report) and, of course, is not even required by the FCRA. The law is clear. Verizon had a duty to investigate.
Three credit bureau disputes later and still no investigation or correction. Finally, after being denied a home loan due to the Verizon fraud account on his credit report, my client found me and we filed suit. The lawsuit triggered something that nothing else had ... removal of the fraud account. And a confidential settlement approximately a year later.
Based upon the above, I am sure Marvin Davis will fit right in with LifeLock's shenanigans.
September 03, 2009
LifeLock is trying to put a positive spin on its loss to Experian
LifeLock, fresh off a defeat at the hands of Experian regarding its illegal fraud alerts, is trying to regain momentum by touting new ways for it to scam its customers. Here's LifeLock's propaganda:
I like the comment about how the CA judge is the only one in the nation to rule the way he did. LifeLock fails to mention that no other judge has had this issue before them. LifeLock would have you think there are tons of other judges that agree with its "unfair business practices". Yet, that's not the case. As far as I know, no other judge has ever ruled on this issue. So LifeLock is winless on this issue.
And, last but not least, LifeLock tries to draw some distinction between an "illegal" act and its "unfair business practice". LifeLock claims that the Court never said it did anything illegal. Well, guess what LifeLock, an unfair business practice is a tort, which means it is illegal. Its just not a criminal act but a civil wrong, which is still against the law and thus "illegal". But why would I expect LifeLock, whose whole business model was based on claiming all its customers were fraud victims regardless of whether anyone ever claimed they were a fraud victim, to know what is or is not illegal.
"LifeLock Inc. over the weekend rolled out plans to implement a new identity theft protection program in the wake of a judge’s ruling that it’s fraud alerts are not allowed.
The company said the new system will use technology, scientific modeling and data mining to protect its 1.5 million subscribers from identity theft, and can begin to identify possibilities before the thefts occur.
'The implementation of our new identity protection system reflects LifeLock’s unyielding commitment to innovation, consumer protection and industry-leading best practices,' said LifeLock CEO Todd Davis. 'Criminals are devising increasingly complex schemes to defraud consumers. Our services must constantly evolve so we are not one, but two, steps ahead.'
The company said it developed new algorithms to spot identity theft, that would look at pattern recognition, and mine for more data sources than credit bureaus, including retailers, banks, mortgage lenders and auto lenders.
The new system will replace the company’s fraud alert system, which was dealt a blow on Friday, when U.S. District Court Judge Andrew Guilford upheld a preliminary ruling in a case brought against LifeLock by Experian Information Solutions Inc., one of the three main credit reporting bureaus.
Experian filed the lawsuit saying the Fair Credit Reporting Act does not allow companies to place fraud alerts for people and that the practice is anti-competitive.
LifeLock General Counsel Clarissa Cerda said there is nothing in the ruling that indicates what LifeLock had done was illegal, but considered it an 'unfair business practice.'
'Although the media has reported that a California judge has ruled that LifeLock’s placing of fraud alerts is illegal, there indeed was no finding in that order that LifeLock’s placing of fraud alerts on behalf of its members was illegal or that such placement violated FCRA or (Fair and Accurate Credit Transactions Act),' she said.
Gee, where do I start? Lets see ... "algorithms to spot identity theft"? What good is that going to do consumers? Other than taking some common sense precautions, identity theft is completely random and unpredictable. There is no way LifeLock can predict who its going to happen to or when. Thus its "algorithms" will only be good after the fact in letting consumers know their identity has been stolen. However, there are plenty of products already available for monitoring your credit, so why use LifeLock?
'Instead, the California judge ruled that our practice was an ‘unfair business practice’ to Experian under the California Unfair Competition Law. While we respectfully disagree with the judge’s ruling, noting that no other court in the country has agreed with Judge Guilford’s reasoning that this type of competition could be an unfair business practice under the California Unfair Competition Law, and intend to appeal such ruling, we will respect the judge’s order. We are confident about LifeLock’s future, and intend to remain the industry leader in the provision of identity theft solutions to consumers.'
LifeLock will roll out its new method of identity theft protections in the coming weeks. Guilford has not yet issued an injunction barring LifeLock from placing the fraud alerts, but had been asked by Experian to do so."
I like the comment about how the CA judge is the only one in the nation to rule the way he did. LifeLock fails to mention that no other judge has had this issue before them. LifeLock would have you think there are tons of other judges that agree with its "unfair business practices". Yet, that's not the case. As far as I know, no other judge has ever ruled on this issue. So LifeLock is winless on this issue.
And, last but not least, LifeLock tries to draw some distinction between an "illegal" act and its "unfair business practice". LifeLock claims that the Court never said it did anything illegal. Well, guess what LifeLock, an unfair business practice is a tort, which means it is illegal. Its just not a criminal act but a civil wrong, which is still against the law and thus "illegal". But why would I expect LifeLock, whose whole business model was based on claiming all its customers were fraud victims regardless of whether anyone ever claimed they were a fraud victim, to know what is or is not illegal.
September 02, 2009
Dr. Doom .... I mean Experian ... wins another round against LifeLock
"COSTA MESA, Calif., Sept. 2 /PRNewswire/ -- Experian((R)) today announced that a federal court in California denied a motion by LifeLock Inc. to reconsider the court's prior ruling which found that LifeLock's practice of setting 90-day fraud alerts for consumers with the three main credit bureaus is unlawful. Experian filed the lawsuit in 2008 alleging that LifeLock activities were contrary to certain provisions of the Fair Credit Reporting Act (FCRA). Experian has requested a permanent injunction, for which a decision is pending.
'Experian is pleased the court continues to recognize the unfair business practices of LifeLock which Experian believes has resulted in a false sense of security and unnecessary costs to consumers,' said Kerry Williams, Group President, Experian Credit Services and Decision Analytics. 'Experian will continually seek [sic.] to ensure that consumers understand their rights and opportunities regarding their credit histories and have access to a variety of services to help protect their personal information.'
The Experian group of companies has been safeguarding consumer credit data for decades [I didn't realize "safeguarding" meant the same as "ruining", guess I need a new thesaurus] and is a trusted provider of both free and fee-based services for consumers to protect and monitor their credit information and ensure their personal data is not compromised. More than 9 million consumers benefit from the companies' credit monitoring services, which is the most widely used for data breach protection. [i.e. you have to buy our monitoring services because heaven forbid we acutally comply with the FCRA and monitor it ourselves]
'Identity theft continues to be a threat to consumers,' said Williams. 'We encourage consumers to take an active approach to their personal information and, as such, Experian companies offer the ability to place free fraud alerts [you mean the free fraud alerts that the FCRA requires Experian to provide?], dispute issues [again, that's not something Experian 'offers' but is something the FCRA requires Experian to receive (and investigate) from consumers] and subscribe to services such as ProtectMyID.com(TM).'
Credit reporting companies like Experian are uniquely positioned to protect the consumer's credit information. [that's true, too bad they don't take advantage of that position]. Consumers have trusted ProtectMyID.com since it was introduced more than a year ago to safeguard their identities. ProtectMyID.com is an identity theft detection, protection and fraud resolution product used by consumers to prevent damages caused by identity theft. [Why is this a service consumers have to pay for, instead of receive automatically, when the FCRA requires that Experian to use reasonable procedures to assure maximum possible accuracy of the credit reports it generates?] It monitors Experian, Equifax and TransUnion credit reports on a daily basis to see if key information has changed, if new data has been added to a member's credit profile, or if personally identifiable information is detected that could indicate fraud or suspicious activity. [So you have to pay for Experian to do what it is already legally required to do?!]"
For the record, while I believe Experian is right in this particular instance, I also know that Experian is not pursuing this case because of any desire to help consumers. Quite the contrary. Experian is only out to protect itself from the hassle of LifeLock's illegal fraud alerts. Fortunately, Experian's interests coincide for once with the good of consumers.
August 25, 2009
Ruling on the way in Experian v. LifeLock
In the battle of the titans ... er, I mean, titanic failures of consumer protection, we can expect a ruling soon. This case is like Darth Vader taking on the Witch King from the Lord of the Rings, or Dr. Doom v. The Joker or Dr. Kevorkian v. Michael Jackson's doctor ... bad guy v. bad guy (or, in the case of Experian v. LifeLock, maybe bad guy v. bad buy?) Anyway, word has it that a ruling is on the way ...
From the Arizona Republic at - http://www.azcentral.com/arizonarepublic/business/articles/2009/08/24/20090824biz-lifelock0825.html
"A U.S. District Court judge in the Central District of California is expected to rule this week on competing motions in a legal battle between credit bureau Experian and Tempe-based identity-theft protection firm LifeLock Inc.
Judge Andrew Guilford partially sided with Experian in May when he ruled LifeLock's practice of enrolling consumers in 90-day fraud alerts with the three main credit bureaus violates the Fair Credit Reporting Act. Experian argues that the law does not allow corporations to set the alerts on consumers' behalf.
In response, Experian sought a permanent injunction against LifeLock's practice, and LifeLock asked Guilford to reconsider his initial ruling. A hearing on both motions took place Monday in Santa Ana, Calif."
Doubt the judge will change his mind, but you never know. As for me, I'm siding with Hannibal Lecter ... I mean Experian, since I don't agree with anyone (corporation, person, puppy) placing a fraud alert on their credit report when there is not even a hint of an allegation of fraud.
From the Arizona Republic at - http://www.azcentral.com/arizonarepublic/business/articles/2009/08/24/20090824biz-lifelock0825.html
"A U.S. District Court judge in the Central District of California is expected to rule this week on competing motions in a legal battle between credit bureau Experian and Tempe-based identity-theft protection firm LifeLock Inc.
Judge Andrew Guilford partially sided with Experian in May when he ruled LifeLock's practice of enrolling consumers in 90-day fraud alerts with the three main credit bureaus violates the Fair Credit Reporting Act. Experian argues that the law does not allow corporations to set the alerts on consumers' behalf.
In response, Experian sought a permanent injunction against LifeLock's practice, and LifeLock asked Guilford to reconsider his initial ruling. A hearing on both motions took place Monday in Santa Ana, Calif."
Doubt the judge will change his mind, but you never know. As for me, I'm siding with Hannibal Lecter ... I mean Experian, since I don't agree with anyone (corporation, person, puppy) placing a fraud alert on their credit report when there is not even a hint of an allegation of fraud.
August 08, 2009
LifeLock gets $40 million from new investors
LifeLock has bilked investors out of $40 Million, supposedly to expand into new distribution channels, although LifeLock will probably need it for all the lawsuits being filed against it now that its illegal practices have been brought to light. But here's the article from Patrick O'Grady of the Phoenix Business Journal:
"LifeLock Inc. raised $40 million in its latest financing round, bringing aboard software piracy heavyweight Symantec Corp. as one of the investors.
The money will be used to help the company expand into different distribution channels, continue its marketing push and keep up with its infrastructure, which has seen the company grow exponentially in the past two years, said CEO Todd Davis.
'We’ll continue to bring out our product offerings, continue to build our infrastructure,' he said, adding the company needs to make sure it has the equipment needed for its more than 440 employees.
In addition to new investor Symantec, a provider of computer and Internet security programs such as Norton AntiVirus, the funding round included previous investors Goldman Sachs & Co., Kleiner Perkins Caufield & Byers and Bessemer Venture Partners.
Symantec and LifeLock announced a partnership Friday morning in which a free, 30-day subscription to LifeLock’s credit alert system is being made available to purchasers of some Symantec products. The deal opens a broader distribution channel for the Scottsdale-based company, which has about 1.5 million clients paying up to $10 a month to have their credit reports monitored for unusual activity.
Part of the investment also will be used to help LifeLock expand beyond providing credit alerts. The Symantec deal is part of the company’s effort to broaden its appeal to providing security in various areas, Davis said.
The funding round is LifeLock’s fourth and one of the largest this year in Arizona.
'For companies that are demonstrating real growth, there is still money to be had,' Davis said.
LifeLock’s four rounds funding have netted the company a total of about $77 million. The company has been expanding despite a setback in a lawsuit brought against it by credit bureau reporting agency Experian, which alleges its placement of fraud alerts are not allowed under the Fair Credit Reporting Act."
To read my prior posts about LifeLock and the various lawsuits being filed against it, see here - http://fcralawyer.blogspot.com/search/label/LifeLock.
"LifeLock Inc. raised $40 million in its latest financing round, bringing aboard software piracy heavyweight Symantec Corp. as one of the investors.
The money will be used to help the company expand into different distribution channels, continue its marketing push and keep up with its infrastructure, which has seen the company grow exponentially in the past two years, said CEO Todd Davis.
'We’ll continue to bring out our product offerings, continue to build our infrastructure,' he said, adding the company needs to make sure it has the equipment needed for its more than 440 employees.
In addition to new investor Symantec, a provider of computer and Internet security programs such as Norton AntiVirus, the funding round included previous investors Goldman Sachs & Co., Kleiner Perkins Caufield & Byers and Bessemer Venture Partners.
Symantec and LifeLock announced a partnership Friday morning in which a free, 30-day subscription to LifeLock’s credit alert system is being made available to purchasers of some Symantec products. The deal opens a broader distribution channel for the Scottsdale-based company, which has about 1.5 million clients paying up to $10 a month to have their credit reports monitored for unusual activity.
Part of the investment also will be used to help LifeLock expand beyond providing credit alerts. The Symantec deal is part of the company’s effort to broaden its appeal to providing security in various areas, Davis said.
The funding round is LifeLock’s fourth and one of the largest this year in Arizona.
'For companies that are demonstrating real growth, there is still money to be had,' Davis said.
LifeLock’s four rounds funding have netted the company a total of about $77 million. The company has been expanding despite a setback in a lawsuit brought against it by credit bureau reporting agency Experian, which alleges its placement of fraud alerts are not allowed under the Fair Credit Reporting Act."
To read my prior posts about LifeLock and the various lawsuits being filed against it, see here - http://fcralawyer.blogspot.com/search/label/LifeLock.
Symantec teaming up with LifeLock? Time to switch to McAfee!
Symantec, the software company that sells the Norton Anti-Virus software, has now teamed up with LifeLock of all companies! Why a legitimate company like Symantec would team up and invest in a scam of a company like LifeLock is beyond me. Here's the story from the Phoenix Business Journal:
"LifeLock Inc. and computer security specialist Symantec Corp. announced a partnership Friday to help prevent identity theft.
The two companies will package a limited edition of Symantec’s Norton Internet Security or Norton AntiVirus with a free 30-day trial membership to LifeLock, 10 percent off a continued membership and two movie tickets.
Millions of people keep financially and personally identifying paperwork on their computers that can be accessed through simple file-sharing programs.
'Online security is a great first line of defense, but the best offline offense is to guard your identity, your money and your credit with identity theft protection,' said Janice Chaffin, group president of the consumer business unit at Cupertino, Calif.-based Symantec (Nasdaq:SYMC).
'In partnership with LifeLock, we want to provide consumers with the tools they need to better safeguard themselves in both worlds.'
LifeLock is looking to partner with other companies to provide better resources for consumers.
'You, your identity and your financial information are more vulnerable than ever before, and people need to protect themselves and their wallets — no matter if they’re in a crowded public place or shopping online from home,' said Todd Davis, CEO of Tempe-based LifeLock."
Notice they had to throw two movie tickets into the "free" offer from LifeLock to actually be giving consumers something of value. If this is the way Norton protects my computer, its time to switch to McAfee!
"LifeLock Inc. and computer security specialist Symantec Corp. announced a partnership Friday to help prevent identity theft.
The two companies will package a limited edition of Symantec’s Norton Internet Security or Norton AntiVirus with a free 30-day trial membership to LifeLock, 10 percent off a continued membership and two movie tickets.
Millions of people keep financially and personally identifying paperwork on their computers that can be accessed through simple file-sharing programs.
'Online security is a great first line of defense, but the best offline offense is to guard your identity, your money and your credit with identity theft protection,' said Janice Chaffin, group president of the consumer business unit at Cupertino, Calif.-based Symantec (Nasdaq:SYMC).
'In partnership with LifeLock, we want to provide consumers with the tools they need to better safeguard themselves in both worlds.'
LifeLock is looking to partner with other companies to provide better resources for consumers.
'You, your identity and your financial information are more vulnerable than ever before, and people need to protect themselves and their wallets — no matter if they’re in a crowded public place or shopping online from home,' said Todd Davis, CEO of Tempe-based LifeLock."
Notice they had to throw two movie tickets into the "free" offer from LifeLock to actually be giving consumers something of value. If this is the way Norton protects my computer, its time to switch to McAfee!
August 06, 2009
New lawsuit against Lifelock
Consumers have now filed a new lawsuit against LifeLock seeking, among other things, a court order requiring LifeLock to comply with a previous court order and halt fraud alerts. Here's the article:
"LifeLock, the Tempe, Arizona-based company that touts identity-theft-prevention services is the target of a consolidated lawsuit claiming that the company misrepresented its product, illegally sold insurance and breached its contracts with customers.
The new consolidated complaint combines 13 lawsuits filed against LifeLock in various jurisdictions and expands the claims against LifeLock, according to Rob Carey, a partner at Hagens Berman Sobol Shapiro and interim lead counsel for the consolidated case.
The lawsuit claims the company defrauds customers by offering services it cannot legally perform and by touting a $1 million guarantee that consumers claim is virtually worthless.
One of the key components of the lawsuit relates to whether LifeLock can lawfully place fraud alerts for consumers. As interim lead counsel for the case, Carey demanded that LifeLock cease placing fraud alerts and advise consumers that the company cannot legally place fraud alerts.
'A federal judge has already confirmed that LifeLock cannot legally place fraud alerts,' said Carey. 'It's time the company shows some respect for the law, stops placing these alerts and transitions into a more legitimate business model.'
The ruling on fraud alerts arose from a suit brought against LifeLock in February 2008 by Experian, one of the major credit reporting agencies. At that time, the agency stopped accepting and renewing requests from LifeLock to place fraud alerts. However, LifeLock continued to collect monthly payments from customers for services, which included fraud alert protection with Experian.
'We intend to show the court that LifeLock's refusal to notify customers of its activities or change its practices violates state and federal laws and demonstrates a clear disregard for its customers,' said Leonard Aragon, another HBSS attorney on the case.
Many of the new allegations in the consolidated complaint are related to what the plaintiff's claim is LifeLock's refusal to comply with the Fair Credit Reporting Act (FCRA). The FCRA says that only an individual can place a fraud alert and the Act's language clearly excludes corporations, such as LifeLock from doing so, the complaint states.
'The consolidated complaint is a call for LifeLock to change its business practices to comply with federal law,' said Carey. 'LifeLock's customers will no longer stand for business as usual.'
The suit claims another legal issue with LifeLock is that the $1 million guarantee is an insurance product that must comply with Arizona Insurance Code, but LifeLock fails to even attempt to comply with the Insurance Code's rules and regulations.
The master complaint represents current or past customers of LifeLock, with the exception of those living in Maryland or West Virginia.
The lawsuit names several counts against LifeLock, including, violation of the Arizona Consumer Fraud Act, false and misleading advertising of an insurance product, unjust enrichment and breach of contract."
If you have been reading this blog, you know that I have a particular disdain for LifeLock (almost as much as I have for Experian, Equifax and Trans Union). My prior posts about what I contend are LifeLock's illegal practices can be found here - http://fcralawyer.blogspot.com/search/label/LifeLock. This new lawsuit bears watching. If any of you out there know any more details about this or other lawsuits against LifeLock, I'd love to hear them.
"LifeLock, the Tempe, Arizona-based company that touts identity-theft-prevention services is the target of a consolidated lawsuit claiming that the company misrepresented its product, illegally sold insurance and breached its contracts with customers.
The new consolidated complaint combines 13 lawsuits filed against LifeLock in various jurisdictions and expands the claims against LifeLock, according to Rob Carey, a partner at Hagens Berman Sobol Shapiro and interim lead counsel for the consolidated case.
The lawsuit claims the company defrauds customers by offering services it cannot legally perform and by touting a $1 million guarantee that consumers claim is virtually worthless.
One of the key components of the lawsuit relates to whether LifeLock can lawfully place fraud alerts for consumers. As interim lead counsel for the case, Carey demanded that LifeLock cease placing fraud alerts and advise consumers that the company cannot legally place fraud alerts.
'A federal judge has already confirmed that LifeLock cannot legally place fraud alerts,' said Carey. 'It's time the company shows some respect for the law, stops placing these alerts and transitions into a more legitimate business model.'
The ruling on fraud alerts arose from a suit brought against LifeLock in February 2008 by Experian, one of the major credit reporting agencies. At that time, the agency stopped accepting and renewing requests from LifeLock to place fraud alerts. However, LifeLock continued to collect monthly payments from customers for services, which included fraud alert protection with Experian.
'We intend to show the court that LifeLock's refusal to notify customers of its activities or change its practices violates state and federal laws and demonstrates a clear disregard for its customers,' said Leonard Aragon, another HBSS attorney on the case.
Many of the new allegations in the consolidated complaint are related to what the plaintiff's claim is LifeLock's refusal to comply with the Fair Credit Reporting Act (FCRA). The FCRA says that only an individual can place a fraud alert and the Act's language clearly excludes corporations, such as LifeLock from doing so, the complaint states.
'The consolidated complaint is a call for LifeLock to change its business practices to comply with federal law,' said Carey. 'LifeLock's customers will no longer stand for business as usual.'
The suit claims another legal issue with LifeLock is that the $1 million guarantee is an insurance product that must comply with Arizona Insurance Code, but LifeLock fails to even attempt to comply with the Insurance Code's rules and regulations.
The master complaint represents current or past customers of LifeLock, with the exception of those living in Maryland or West Virginia.
The lawsuit names several counts against LifeLock, including, violation of the Arizona Consumer Fraud Act, false and misleading advertising of an insurance product, unjust enrichment and breach of contract."
If you have been reading this blog, you know that I have a particular disdain for LifeLock (almost as much as I have for Experian, Equifax and Trans Union). My prior posts about what I contend are LifeLock's illegal practices can be found here - http://fcralawyer.blogspot.com/search/label/LifeLock. This new lawsuit bears watching. If any of you out there know any more details about this or other lawsuits against LifeLock, I'd love to hear them.
July 29, 2009
More coverage regarding Experian's win against LifeLock
The following is an article from Jeff Blyskal at ConsumerReports.org about a case I reported on a while back (see my post at http://fcralawyer.blogspot.com/2009/06/another-article-about-lifelock.html).
"The days of paying companies $10 a month to place fraud alerts on your credit report every three months may be numbered, thanks to a recent U.S. District Court ruling. Two identity theft protection companies have already stopped placing the paid alerts.
In late May, Judge Andrew Guilford, of the U.S. District Court for the Central District of California, ruled that the federal Fair Credit Reporting Act (FCRA) prohibits commercial enterprises from placing fraud alerts on paying consumers’ credit reports. The partial summary judgment was in favor of Experian, one of the big three credit bureaus, which had sued LifeLock, one of the first fraud alert placement companies.
As the Consumer Reports Money Adviser first reported in December, 2007, LifeLock made a big business out of charging consumers $10 a month to place fraud alerts on their credit reports, which are supposed to stop ID thieves. When a crook tries to open a new credit account in your name, the prospective lender is supposed to see the alert when he pulls your credit report, and to call you to check whether the person who says he’s you really is you.
Problem was, we pointed out, the FCRA gives consumers the right to place fraud alerts themselves for free. What’s more, fraud alerts are no guarantee against ID theft, since some lenders don’t see them and let crooks open accounts in other people’s names anyway. 'We know this isn’t 100 percent bulletproof,' LifeLock CEO Todd Davis told us. 'You can still be a victim. If that happens, we’re there to clean up the mess' with a $1 million guarantee.
Davis was not available to comment on the ruling, but a company spokesman said, 'We have filed our motion for the court to reconsider its ruling in light of new evidence we have uncovered since the hearing in January of 2009. We have provided the court with extensive arguments and expert information, which we believe prove that the court's initial ruling should be changed.'
LifeLock did not respond to our request for a copy of its motion and new evidence.
'Experian is pleased with the ruling of the court, as it upholds the regulations outlined by the Fair Credit Reporting Act,' an Experian spokesperson said. 'Experian believes that the court has rightly recognized Lifelock’s unfair business practices. This ruling is not just positive for Experian, but for consumers. Experian will continue to work with consumers to provide education and services to assist them with understanding the credit reporting system.'
One other identity protection company, Debix, already has stopped providing fraud alerts. (See more on Debix’s better fraud-alert system in my next blog.) And IdentitySecure has shifted to letting consumers place their own alerts directly with the credit bureaus through a simple web interface and sending customers a reminder e-mail every 90 days so they can renew the alert. Equifax also has stopped accepting fraud alerts from LifeLock. 'Our decision to stop accepting LifeLock generated fraud alerts is based completely and solely on our interpretation and understanding of FCRA and is consistent with the recent interpretation by the U.S. District Court for the Central District of California. And in that interpretation there is what we consider an unequivocal ruling that LifeLock’s practices are in violation of public policy,' an Equifax spokesman said.
What will happen to LifeLock now? The company wouldn’t answer further questions. But a customer service representative on LifeLock’s toll free line told me that the company continues to place fraud alerts through TransUnion, which, in turn, told me, 'We are aware of the litigation and the decision of the court as to LifeLock's practices related to Experian. Pending a specific ruling in this matter from the court, we have continued to operate as in the past, in support of each consumer’s right to choose.'”
Interesting that Experian actually think the FCRA required something. They usually claim the opposite in my cases, that whatever I am claiming they didn't do was not required by the FCRA.
For more about LifeLock, see here - http://fcralawyer.blogspot.com/search/label/LifeLock.
"The days of paying companies $10 a month to place fraud alerts on your credit report every three months may be numbered, thanks to a recent U.S. District Court ruling. Two identity theft protection companies have already stopped placing the paid alerts.
In late May, Judge Andrew Guilford, of the U.S. District Court for the Central District of California, ruled that the federal Fair Credit Reporting Act (FCRA) prohibits commercial enterprises from placing fraud alerts on paying consumers’ credit reports. The partial summary judgment was in favor of Experian, one of the big three credit bureaus, which had sued LifeLock, one of the first fraud alert placement companies.
As the Consumer Reports Money Adviser first reported in December, 2007, LifeLock made a big business out of charging consumers $10 a month to place fraud alerts on their credit reports, which are supposed to stop ID thieves. When a crook tries to open a new credit account in your name, the prospective lender is supposed to see the alert when he pulls your credit report, and to call you to check whether the person who says he’s you really is you.
Problem was, we pointed out, the FCRA gives consumers the right to place fraud alerts themselves for free. What’s more, fraud alerts are no guarantee against ID theft, since some lenders don’t see them and let crooks open accounts in other people’s names anyway. 'We know this isn’t 100 percent bulletproof,' LifeLock CEO Todd Davis told us. 'You can still be a victim. If that happens, we’re there to clean up the mess' with a $1 million guarantee.
Davis was not available to comment on the ruling, but a company spokesman said, 'We have filed our motion for the court to reconsider its ruling in light of new evidence we have uncovered since the hearing in January of 2009. We have provided the court with extensive arguments and expert information, which we believe prove that the court's initial ruling should be changed.'
LifeLock did not respond to our request for a copy of its motion and new evidence.
'Experian is pleased with the ruling of the court, as it upholds the regulations outlined by the Fair Credit Reporting Act,' an Experian spokesperson said. 'Experian believes that the court has rightly recognized Lifelock’s unfair business practices. This ruling is not just positive for Experian, but for consumers. Experian will continue to work with consumers to provide education and services to assist them with understanding the credit reporting system.'
One other identity protection company, Debix, already has stopped providing fraud alerts. (See more on Debix’s better fraud-alert system in my next blog.) And IdentitySecure has shifted to letting consumers place their own alerts directly with the credit bureaus through a simple web interface and sending customers a reminder e-mail every 90 days so they can renew the alert. Equifax also has stopped accepting fraud alerts from LifeLock. 'Our decision to stop accepting LifeLock generated fraud alerts is based completely and solely on our interpretation and understanding of FCRA and is consistent with the recent interpretation by the U.S. District Court for the Central District of California. And in that interpretation there is what we consider an unequivocal ruling that LifeLock’s practices are in violation of public policy,' an Equifax spokesman said.
What will happen to LifeLock now? The company wouldn’t answer further questions. But a customer service representative on LifeLock’s toll free line told me that the company continues to place fraud alerts through TransUnion, which, in turn, told me, 'We are aware of the litigation and the decision of the court as to LifeLock's practices related to Experian. Pending a specific ruling in this matter from the court, we have continued to operate as in the past, in support of each consumer’s right to choose.'”
Interesting that Experian actually think the FCRA required something. They usually claim the opposite in my cases, that whatever I am claiming they didn't do was not required by the FCRA.
For more about LifeLock, see here - http://fcralawyer.blogspot.com/search/label/LifeLock.
June 21, 2009
15 U.S.C. 1681c-1
Today, I begin my explanation of 15 U.S.C. 1681c-1 of the Fair Credit Reporting Act.
"15 U.S.C. 1681c-1. Identity theft prevention; fraud alerts and active duty alerts.
(a) One-call Fraud Alerts
(1) Initial alerts. Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency described in section 603(p) [15 U.S.C. 1681a(p)] that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall --
(A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, for a period of not less than 90 days, beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period, and the agency has received appropriate proof of the identity of the requester for such purpose; and
(B) refer the information regarding the fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f)."
[This section requires the consumer reporting agency to report a fraud alert as part of a consumer's credit report for 90 days after the request for the fraud alert is made, assuming the consumer reporting agency receives sufficient proof of the identity of the person requesting the fraud alert. The person requesting the fraud alert must have a good faith suspicion that he or she is either a fraud victim or is about to become a fraud victim. This is the problem with the way LifeLock used to do business since it requested fraud alerts for all its customers, regardless of whether they were either fraud victims or thought they were about to be fraud victims.
The consumer reporting agency that receives the request for a fraud alert must also relay the fraud alert to the other consumer reporting agencies.]
"(2) Access to free reports. In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant ot this subsection, the consumer reporting agency shall --
(A) disclose to the consumer that the consumer may request a free copy of the file of the consumer pursuant to section 612(d); and
(B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A)."
[This subsection requires the consumer reporting agency to tell the consumer that requests a fraud alert that he or she is entitled to a free copy of his or her credit file (i.e. his or her credit report) and provide all disclosures required by section 609 (which we will get to eventually). Oddly enough, I don't think I have ever seen a credit bureau tell a consumer who requested a fraud alert that he can have a free credit report.]
"(b) Extended Alerts
(1) In general. Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who submits an identity theft report to a consumer reporting agency described in section 603(p) that maintains a file on the consumer, if the agency has received appropriate proof of the identity of the requester, the agency shall --
(A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, during the 7-year period beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period and the agency has received appropriate proof of the identity of the requester for such purpose;
(B) during the 5-year period beginning on the date of such request, exclude the consumer from any list of consumers prepared by the consumer reporting agency and provided to any third party to offer credit or insurance to the consumer as part of a transaction that was not initiated by the consumer, unless the consumer or such representative requests that such exclusion be rescinded before the end of such period; and
(C) refer the information regarding the extended fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f)."
[This section requires the consumer reporting agency to add a fraud alert to a consumer's credit report for 7 years if the consumer requests it and provides an identity theft report. The credit bureau must also remove the consumer's name for five years from any list of consumers prepared by the credit bureau and provided to a third party regarding an offer of credit or insurance.]
"(2) Access to free reports. In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant to this subsection, the consumer reporting agency shall --
(A) disclose to the consumer that the consumer may request 2 free copies of the file of the consumer pursuant to section 612(d) during the 12-month period beginning on the date on which the fraud alert was included in the file; and
(B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A)."
[Subsection (2) requires the credit bureau who added a fraud alert regarding the consumer to tell the consumer that he or she is entitled to two free credit reports during the first 12 months of the fraud alert. Again, I have never seen a credit bureau comply with this section.]
I will continue my explanation of 15 U.S.C. 1681c-1 with subsection (c) in part 2.
"15 U.S.C. 1681c-1. Identity theft prevention; fraud alerts and active duty alerts.
(a) One-call Fraud Alerts
(1) Initial alerts. Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency described in section 603(p) [15 U.S.C. 1681a(p)] that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall --
(A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, for a period of not less than 90 days, beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period, and the agency has received appropriate proof of the identity of the requester for such purpose; and
(B) refer the information regarding the fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f)."
[This section requires the consumer reporting agency to report a fraud alert as part of a consumer's credit report for 90 days after the request for the fraud alert is made, assuming the consumer reporting agency receives sufficient proof of the identity of the person requesting the fraud alert. The person requesting the fraud alert must have a good faith suspicion that he or she is either a fraud victim or is about to become a fraud victim. This is the problem with the way LifeLock used to do business since it requested fraud alerts for all its customers, regardless of whether they were either fraud victims or thought they were about to be fraud victims.
The consumer reporting agency that receives the request for a fraud alert must also relay the fraud alert to the other consumer reporting agencies.]
"(2) Access to free reports. In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant ot this subsection, the consumer reporting agency shall --
(A) disclose to the consumer that the consumer may request a free copy of the file of the consumer pursuant to section 612(d); and
(B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A)."
[This subsection requires the consumer reporting agency to tell the consumer that requests a fraud alert that he or she is entitled to a free copy of his or her credit file (i.e. his or her credit report) and provide all disclosures required by section 609 (which we will get to eventually). Oddly enough, I don't think I have ever seen a credit bureau tell a consumer who requested a fraud alert that he can have a free credit report.]
"(b) Extended Alerts
(1) In general. Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who submits an identity theft report to a consumer reporting agency described in section 603(p) that maintains a file on the consumer, if the agency has received appropriate proof of the identity of the requester, the agency shall --
(A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, during the 7-year period beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period and the agency has received appropriate proof of the identity of the requester for such purpose;
(B) during the 5-year period beginning on the date of such request, exclude the consumer from any list of consumers prepared by the consumer reporting agency and provided to any third party to offer credit or insurance to the consumer as part of a transaction that was not initiated by the consumer, unless the consumer or such representative requests that such exclusion be rescinded before the end of such period; and
(C) refer the information regarding the extended fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f)."
[This section requires the consumer reporting agency to add a fraud alert to a consumer's credit report for 7 years if the consumer requests it and provides an identity theft report. The credit bureau must also remove the consumer's name for five years from any list of consumers prepared by the credit bureau and provided to a third party regarding an offer of credit or insurance.]
"(2) Access to free reports. In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant to this subsection, the consumer reporting agency shall --
(A) disclose to the consumer that the consumer may request 2 free copies of the file of the consumer pursuant to section 612(d) during the 12-month period beginning on the date on which the fraud alert was included in the file; and
(B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A)."
[Subsection (2) requires the credit bureau who added a fraud alert regarding the consumer to tell the consumer that he or she is entitled to two free credit reports during the first 12 months of the fraud alert. Again, I have never seen a credit bureau comply with this section.]
I will continue my explanation of 15 U.S.C. 1681c-1 with subsection (c) in part 2.
June 12, 2009
Experian's dislike of LifeLock is finally explained
I finally figured out why Experian, who is not normally on the side of anyone but itself, was willing to take on LifeLock, which, like Experian, is not on the side of consumers either. I figured at first it was just that LifeLock made Experian's life hard by requesting fraud alerts for its clients regardless of whether the customer ever even claimed to be a fraud victim.
But, while checking the ads appearing on my own blog, it all finally became clear. As you can possibly still see at the top of the blog (although I'm trying to block their ads from appearing), there is an ad for http://www.protectmyid.com/. This company markets to the same audience as LifeLock, i.e. those scared of identity theft and thinking there is some magic bullet that can easily protect them. When I went to http://www.protectmyid.com/, I found that http://www.protectmyid.com/ is part of a family of online sites that belong to consumerinfo.com, which is owned by.... you guessed it, Experian. So Experian is attacking LifeLock in an effort to hamper and/or eliminate the competition for one of its websites. Figures, huh?
But, while checking the ads appearing on my own blog, it all finally became clear. As you can possibly still see at the top of the blog (although I'm trying to block their ads from appearing), there is an ad for http://www.protectmyid.com/. This company markets to the same audience as LifeLock, i.e. those scared of identity theft and thinking there is some magic bullet that can easily protect them. When I went to http://www.protectmyid.com/, I found that http://www.protectmyid.com/ is part of a family of online sites that belong to consumerinfo.com, which is owned by.... you guessed it, Experian. So Experian is attacking LifeLock in an effort to hamper and/or eliminate the competition for one of its websites. Figures, huh?
June 01, 2009
Another article about LifeLock
Here's another article about the California Federal Court's ruling that LifeLock must stop requesting fraud alerts for its customers. This article is from The Columbus Dispatch and indicates that the price of identity theft protection may rise.
FRAUD-ALERT LAWSUIT
Cost of ID theft protection could be about to rise
Monday, June 1, 2009 6:23 AM
SAN JOSE, Calif. - Companies that sell "identity theft protection" present an alluring but questionable proposition.
For as much as about $100 per year, the main thing they do is set fraud alerts that force banks to call people before new lines of credit are opened in their name. The alerts can be useful - but people can set them themselves, at no cost.
Now even that function could be taken away from the ID theft-prevention services.
A federal court in California has blocked Tempe, Ariz.-based Life-Lock, one of the industry's biggest players, from setting fraud alerts with Experian, one of the three main credit-reporting agencies that manage the fraud alerts.
Experian is suing LifeLock, claiming that LifeLock's automatic renewal of customers' fraud alerts - which happens every 90 days, when they expire - costs Experian millions of dollars in processing expenses.
In a ruling last week, a judge agreed with one of Experian's central arguments: that LifeLock isn't authorized to set alerts for consumers, and that federal law requires consumers to set alerts themselves by contacting credit bureaus directly.
The ruling has caused at least one ID theft prevention service, Debix, to announce that it plans to drop fraud alerts and offer credit-monitoring instead. The trend is likely to play out across the industry.
"It's going to be a game-changer," said Jay Foley, executive director of the Identity Theft Resource Center, a nonprofit organization based in San Diego.
For consumers, this means "identity theft protection" services could get more expensive - and less useful. Credit-monitoring services can cost $180 a year, and they don't always detect a fraud.
In contrast, fraud alerts are supposed to make it much harder for identity theft to be pulled off in the first place.
When a bank or retailer runs a credit check on someone for a new account, if a fraud alert pops up, the bank or retailer is required to call that person or use any other "reasonable policies and procedures" to verify their identity. That is meant to stop a scammer who goes into a retail store and tries, for example, to get instant credit under someone else's name and then walk out with a TV the other guy would be on the hook for.
LifeLock's chief executive, Todd Davis, who is known for plastering his Social Security number on billboards in an advertising gimmick, says his company will fight the court ruling and won't stop setting fraud alerts with the other two credit bureaus, Equifax and TransUnion.
Placing an alert at one bureau means an alert is placed at all three, because they have to notify one another.
"It's going to be business as usual until we hear they don't agree with the way we're interpreting this," Davis said. "We're not worried that this is some catastrophic decision."
At least one of his competitors disagrees.
Bo Holland, the founder of Debix, which offers ID theft protection for $24 a year, said his company will now stop setting fraud alerts and sell credit-monitoring instead. Holland said many of Debix's clients are corporations that subsidize the service for employees and customers after a breach.
Losing the ability to set fraud alerts is "definitely a step backward. It's been a very effective mechanism; creditors did a pretty good job of doing what they were supposed to do," he said. "Absolutely, I'm sad to see it go."
Holland noted, though, that fraud alerts have weaknesses, because banks will sometimes ask "security questions" of credit applicants instead of calling a consumer before opening a new account. If criminals have enough personal information about their victims, the con artists might be able to answer those questions, and the consumer would never get a call.
Representatives for another big ID theft protection service, TrustedID (which costs around $100 a year), did not return messages seeking comment.
Experian's lawsuit is not the first against LifeLock. Some customers have sued, saying they were misled about their level of protection.
The main thing that services such as LifeLock guard against is credit fraud. But there are other types of fraud, such as using someone's Social Security number to get a job or medical coverage, or giving it to police to impersonate someone who is innocent. A fraud alert on a credit report is powerless against those crimes.
FRAUD-ALERT LAWSUIT
Cost of ID theft protection could be about to rise
Monday, June 1, 2009 6:23 AM
SAN JOSE, Calif. - Companies that sell "identity theft protection" present an alluring but questionable proposition.
For as much as about $100 per year, the main thing they do is set fraud alerts that force banks to call people before new lines of credit are opened in their name. The alerts can be useful - but people can set them themselves, at no cost.
Now even that function could be taken away from the ID theft-prevention services.
A federal court in California has blocked Tempe, Ariz.-based Life-Lock, one of the industry's biggest players, from setting fraud alerts with Experian, one of the three main credit-reporting agencies that manage the fraud alerts.
Experian is suing LifeLock, claiming that LifeLock's automatic renewal of customers' fraud alerts - which happens every 90 days, when they expire - costs Experian millions of dollars in processing expenses.
In a ruling last week, a judge agreed with one of Experian's central arguments: that LifeLock isn't authorized to set alerts for consumers, and that federal law requires consumers to set alerts themselves by contacting credit bureaus directly.
The ruling has caused at least one ID theft prevention service, Debix, to announce that it plans to drop fraud alerts and offer credit-monitoring instead. The trend is likely to play out across the industry.
"It's going to be a game-changer," said Jay Foley, executive director of the Identity Theft Resource Center, a nonprofit organization based in San Diego.
For consumers, this means "identity theft protection" services could get more expensive - and less useful. Credit-monitoring services can cost $180 a year, and they don't always detect a fraud.
In contrast, fraud alerts are supposed to make it much harder for identity theft to be pulled off in the first place.
When a bank or retailer runs a credit check on someone for a new account, if a fraud alert pops up, the bank or retailer is required to call that person or use any other "reasonable policies and procedures" to verify their identity. That is meant to stop a scammer who goes into a retail store and tries, for example, to get instant credit under someone else's name and then walk out with a TV the other guy would be on the hook for.
LifeLock's chief executive, Todd Davis, who is known for plastering his Social Security number on billboards in an advertising gimmick, says his company will fight the court ruling and won't stop setting fraud alerts with the other two credit bureaus, Equifax and TransUnion.
Placing an alert at one bureau means an alert is placed at all three, because they have to notify one another.
"It's going to be business as usual until we hear they don't agree with the way we're interpreting this," Davis said. "We're not worried that this is some catastrophic decision."
At least one of his competitors disagrees.
Bo Holland, the founder of Debix, which offers ID theft protection for $24 a year, said his company will now stop setting fraud alerts and sell credit-monitoring instead. Holland said many of Debix's clients are corporations that subsidize the service for employees and customers after a breach.
Losing the ability to set fraud alerts is "definitely a step backward. It's been a very effective mechanism; creditors did a pretty good job of doing what they were supposed to do," he said. "Absolutely, I'm sad to see it go."
Holland noted, though, that fraud alerts have weaknesses, because banks will sometimes ask "security questions" of credit applicants instead of calling a consumer before opening a new account. If criminals have enough personal information about their victims, the con artists might be able to answer those questions, and the consumer would never get a call.
Representatives for another big ID theft protection service, TrustedID (which costs around $100 a year), did not return messages seeking comment.
Experian's lawsuit is not the first against LifeLock. Some customers have sued, saying they were misled about their level of protection.
The main thing that services such as LifeLock guard against is credit fraud. But there are other types of fraud, such as using someone's Social Security number to get a job or medical coverage, or giving it to police to impersonate someone who is innocent. A fraud alert on a credit report is powerless against those crimes.
LifeLock ordered to stop posting fraud alerts to consumers' Experian credit reports
LifeLock, who I posted about previously, has been ordered by a federal court in California to cease renewing fraud alerts for its customers with Experian, one of the big three credit reporting agencies.
In its lawsuit against LifeLock, Experian claims that LifeLock's automatic renewal of its customers' fraud alerts — which happens every 90 days, when the fraud alerts automatically expire — costs Experian millions of dollars in processing expenses. While I am not concerned about the cost to Experian, who profits millions every year by selling inaccurate information about consumers, I am concerned that LifeLock's practicing of requesting fraud alerts for customers who are not even claiming they are fraud victims is itself fraudulent. See my previous post about LifeLock at http://fcralawyer.blogspot.com/2009/05/lifelock-does-not-work.html.
U.S. District Judge Andrew Guilford, a federal judge in the Central District of California, agreed with Experian that the Fair Credit Reporting Act does not authorize LifeLock to set fraud alerts for consumers. Instead, Experian claimed and Judge Andrew Guilford ruled, the FCRA requires consumers to request fraud alerts themselves by contacting the credit bureaus directly. As a result, Judge Guilford granted Experian's motion for summary judgment, finding that LifeLock's requests for fraud alerts violated the Fair Credit Reporting Act. Judge Guilford's also ordered LifeLock to stop requesting fraud alerts on behalf of its customers.
In response to this ruling, at least one identity theft prevention service, Debix, announced it plans to drop fraud alerts and offer credit monitoring instead.
See the USA Today's full article about this ruling at http://www.usatoday.com/tech/news/2009-05-29-id-theft_N.htm?csp=27&RM_Exclude=Juno
In its lawsuit against LifeLock, Experian claims that LifeLock's automatic renewal of its customers' fraud alerts — which happens every 90 days, when the fraud alerts automatically expire — costs Experian millions of dollars in processing expenses. While I am not concerned about the cost to Experian, who profits millions every year by selling inaccurate information about consumers, I am concerned that LifeLock's practicing of requesting fraud alerts for customers who are not even claiming they are fraud victims is itself fraudulent. See my previous post about LifeLock at http://fcralawyer.blogspot.com/2009/05/lifelock-does-not-work.html.
U.S. District Judge Andrew Guilford, a federal judge in the Central District of California, agreed with Experian that the Fair Credit Reporting Act does not authorize LifeLock to set fraud alerts for consumers. Instead, Experian claimed and Judge Andrew Guilford ruled, the FCRA requires consumers to request fraud alerts themselves by contacting the credit bureaus directly. As a result, Judge Guilford granted Experian's motion for summary judgment, finding that LifeLock's requests for fraud alerts violated the Fair Credit Reporting Act. Judge Guilford's also ordered LifeLock to stop requesting fraud alerts on behalf of its customers.
In response to this ruling, at least one identity theft prevention service, Debix, announced it plans to drop fraud alerts and offer credit monitoring instead.
See the USA Today's full article about this ruling at http://www.usatoday.com/tech/news/2009-05-29-id-theft_N.htm?csp=27&RM_Exclude=Juno
May 30, 2009
LifeLock does not work
You've probably heard the ads and seen the commercials for "LifeLock", which claims to be able to prevent your identity from being stolen. Believe me, there's absolutely no 100% way to prevent your identity from being stolen. LifeLock is just another company preying on victims of identity theft or people scared of having their identity stolen.
LifeLock's sales gimmick is that its CEO reveals his real Social Security number on its advertisements, supposedly because LifeLock can prevent his identity from being stolen. Wrong. LifeLock's ads fail to tell you that his identity has been stolen numerous times since his Social Security number started being revealed in LifeLock's ad campaign, despite LifeLock's supposed "protection".
Not only does LifeLock not work, what it does do can be done easily and for free by you. All LifeLock does is add fraud alerts to your credit reports (regardless of whether you are a fraud victim or not), take you off junk mail lists and request your free credit reports for you. Everything that LifeLock supposedly does for you, you can do for yourself with one letter to each of the credit bureaus and the completion of one simple form sent to annualcreditreport.com. Why pay LifeLock over $100 a year for that, especially in this economy.
LifeLock used to automatically tell each of the credit bureaus that its customers were fraud victims, even if they were not. In fact, why sign up for LifeLock AFTER your identity was stolen? Isn't the whole point to sign up and PROTECT your identity? But LifeLock would tell the credit bureaus that its customers were already fraud victims, thereby committing a fraud themselves and, in the process, weakening any case its clients might have under the Fair Credit Reporting Act, since juries don't take kindly to plaintiffs who commit fraud but then complain when someone commits one against them.
I guess LifeLock got sued for this fraudulent practice enough times so that now they only report its customers as fraud victims if they are actually victims of identity theft or suspect they are identity theft victims. But if that is already true, then it is already too late for LifeLock to help them, so what's the point? The truth is ... there is no point to LifeLock. It does not work. It does not do anything that you can't do yourself easily for free. And it does not work. I know I said that last one twice but that was on purpose since LifeLock is a total waste of money.
Advice from this consumer attorney, save your money and DON'T USE LIFELOCK.
LifeLock's sales gimmick is that its CEO reveals his real Social Security number on its advertisements, supposedly because LifeLock can prevent his identity from being stolen. Wrong. LifeLock's ads fail to tell you that his identity has been stolen numerous times since his Social Security number started being revealed in LifeLock's ad campaign, despite LifeLock's supposed "protection".
Not only does LifeLock not work, what it does do can be done easily and for free by you. All LifeLock does is add fraud alerts to your credit reports (regardless of whether you are a fraud victim or not), take you off junk mail lists and request your free credit reports for you. Everything that LifeLock supposedly does for you, you can do for yourself with one letter to each of the credit bureaus and the completion of one simple form sent to annualcreditreport.com. Why pay LifeLock over $100 a year for that, especially in this economy.
LifeLock used to automatically tell each of the credit bureaus that its customers were fraud victims, even if they were not. In fact, why sign up for LifeLock AFTER your identity was stolen? Isn't the whole point to sign up and PROTECT your identity? But LifeLock would tell the credit bureaus that its customers were already fraud victims, thereby committing a fraud themselves and, in the process, weakening any case its clients might have under the Fair Credit Reporting Act, since juries don't take kindly to plaintiffs who commit fraud but then complain when someone commits one against them.
I guess LifeLock got sued for this fraudulent practice enough times so that now they only report its customers as fraud victims if they are actually victims of identity theft or suspect they are identity theft victims. But if that is already true, then it is already too late for LifeLock to help them, so what's the point? The truth is ... there is no point to LifeLock. It does not work. It does not do anything that you can't do yourself easily for free. And it does not work. I know I said that last one twice but that was on purpose since LifeLock is a total waste of money.
Advice from this consumer attorney, save your money and DON'T USE LIFELOCK.
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