Thursday, February 28, 2008

Credit Bureau Alleges Lifelock Identity Theft Service is Fraud

Credit-reporting agency Experian has filed a lawsuit
against identity theft services company Lifelock,
charging it with "misleading advertising and fraud.
"

Additionally, Lifelock, allegedly placed fraud alerts
illegally on credit files maintained by Experian.

 Credit Bureau Alleges Lifelock Identity Theft Service is Fraud




Experian’s lawsuit claims that LifeLock is engaging
in deceptive and fraudulent behavior by adding
hundreds of thousands of fraud alerts every 90
days to Experian’s consumer credit database in
a manner that was not intended by Congress when
it implemented the federal Fair Credit Reporting
Act (FCRA).

The complaint alleges that corporations are
specifically prohibited from adding fraud
alerts
to consumer credit files and that LifeLock’s
service uses consumers’ free yearly allocation of credit
reports without adequate disclosure.

The heart of the Experian complaint and the media
counter attack from Lifelock is about money. While
Experian certainly has made some valid points in their
complaint, let's face it Lifelock's revenue stream comes
at the expense of the credit bureaus.

With over 700,000 members paying $10 monthly, according
to Lifelock, that's over $80 million in annual revenue. Now,
combine that with the $25 million in venture funding Lifelock
announced last month and - well you get the picture - especially
if you work at Experian. By the way, Experian markets their own
credit monitoring service as a means for consumers to protect
against identity theft.

How is the consumer's best interest being served in all of this
public
squabbling over which company is wrong or right?
What should
the average citizen do?


Well, let's take a closer look at Experian's complaint.

The Fair Credit Reporting Act (FCRA) is a federal law
which provides several rights to protect consumers and
their credit information. While, we're not lawyers here,
Experian raises an interesting point against Lifelock's
business model if in fact they are illegally placing fraud
alert requests.

Furthermore, if the average citizen knew they could request a
fraud alert
themselves, thereby cutting out the middle man
(Lifelock), why would
there even be grounds for Experian's
lawsuit.


While not taking sides, we can definitely inform our readers that
from a review of the Experian complaint, Lifelock appears to be
deriving revenue by taking advantage of the following services
which are free and/or can be directly ordered by any
consumer
armed with the proper contact information:

Junk Mail Restricted

On the next business day after our request:
You will be sent an email from us stating that
we have processed the request to remove
your name from Junk Mail lists. Not only is
junk mail annoying, statistics show it’s also
one of the most common ways thieves hijack
your identity.

Pre-approved credit offers blocked

You will be sent an email from us saying that
we've asked for you to be removed from
pre-approved credit offer lists. Like junk mail,
by blocking irritating offers, we also block one
of the avenues thieves use to steal your identity.

Credit bureaus contacted

Within 24 hours of our request:
You will receive an email from us stating that
fraud alerts have been requested on your behalf.
When fraud alerts are established with the major
credit bureaus, creditors are required to verify
your identity before opening any new lines of
credit, issuing new cards or increasing your credit limit.

LifeLock orders credit reports You will receive an
email from us stating that your credit reports have
been ordered on your behalf from the major credit
bureaus. Your reports will be sent directly to you.

What is a Fraud Alert?

Usually within an hour of your enrollment as
a member of LifeLock, we request alerts be
set on all of your credit reports at Equifax,
Experian and TransUnion. Within a week
or two after enrolling, these major credit
bureaus will send you credit reports showing
your alerts are in place.

So, our tip for today is two fold. Before considering
services from Lifelock, take a close look at what
you actually can get by directly engaging the
sources:

Junk Mail Restricted

DMA’s Mail Preference Service

Pre-Approved Credit Offers Restricted

www.optoutprescreen.com
1-888-5-OPTOUT (1-888-567-8688)

Fraud Alerts Placed with Credit Bureaus


Free Credit Reports

AnnualCreditReport.com
1-877-322-8228

Finally, as part of our second tip, make sure
to check out the rest of our website to find
the many other no or low cost options you
can leverage against would be identity thieves.

Remember, only a portion of all identity theft
cases are the result of someone getting
access
to your credit information.

Medical, criminal, & public information is more
accessible and vastly harder to detect abuses
against than a credit file.


So, make sure to also tell a friend about this
important new development in identity theft
prevention tips.

11 Comments:

At 11:50 PM, Anonymous Anonymous said...

Lifelock again?!!

Why is it that when ever I read
news about this company, it always
seems to be spectactular?

From the founder, Mr. Maynard's
checkered past to the current
CEO's over the top promotion of
his personal SSN on their television
ads, to now this legal action from Experian.

What is it "where there's smoke, there's fire?".

I can't help wondering if I were one of those 700,000 Lifelock subscribers, would I feel comfortable doing business with a company that repeatedly seems to play it so fast and loose.

After all, isn't the purpose of identity theft prevention services supposed to enable me to sleep peacefully at night?

 
At 11:59 PM, Blogger agent99 said...

Anonymous said...

After all, isn't the purpose of identity theft prevention services supposed to enable me to sleep peacefully at night?

---

Yes, that is if someone is monitoring the monitors to make sure we all do not get unnecessarily ripped off :>

I guess that's what Experian's
trying to say publicly with their
lawsuit against LifeLock.

We would like, though, to hear
more thoughts from our readers on
this.

What do you think?

 
At 8:00 AM, Anonymous Anonymous said...

I think there are two questions.
1) Are fraud alerts truly identity theft prevention?
2) Would it be actually possible to make a claim and get reimbursed with the $1 million guarantee?

A news channel recently tested the three "fraud alert prevention" companies.

http://cbs4denver.com/consumer/credit.protection.identity.2.662760.html

 
At 1:46 AM, Blogger agent99 said...

Anonymous said...

1) Are fraud alerts truly identity theft prevention?

----

Yes, not ideal, but better than
not having anything "red flagged"
on your credit record which would
alert credit grantors to automatically extend additional credit accounts in your name.

For more supporting reasons, including victim testimonials,
check out our site search results
located here:

http://idtheftsecrets.blogspot.com/search?q=fraud+alert

 
At 8:32 AM, Blogger gallioct said...

I don't think I have ever really feared having my identity stolen, but when I apply for credit cards and other types of credit build I extremely careful who I use I like to use store credit card I feel that they are safer then other card. check out this article

 
At 11:31 AM, Anonymous experts on credit said...

Sounds like Lifelock is just taking advantage of the consumer here. I doubt most people would pay if they knew the services were already available to them.

 
At 9:52 PM, Blogger agent99 said...

Anonymous experts on credit said...

Sounds like Lifelock is just taking advantage of the consumer here. I doubt most people would pay if they knew the services were already available to them.
---
You raise a very interesting point, there!

 
At 6:04 PM, Anonymous Anonymous said...

As my momma always said, "if it sounds too good to be true, it usually is just that - not true at all!"

Where does Lifelock get off ripping honest people for services you can get freely?

 
At 9:01 AM, Anonymous Anonymous said...

It's about time management with third party companied. Yes, you can do it all on your own but how much time is it going to take to do it? Also, what happens if you don't set it up as a recurring task to remind you to re-enter it.

In my case I work a job that requires travel frequently out of the country (don't think I am some multi-billionaire because I earn less than $50K annual - and when I travel there is no time for recreation just 12-18 hour work days.

That being said, I am not always in a position to manage this type of "personal project". It's an inexpensive way to outsource that tasking.

True story - the CRA's refused to put fraud alerts on my report even though I suspected I was "at risk" because it appeared someone had rifled through a hotel room while traveling out of the country.

The CRA's wouldn't put the alert on instantly and I was out of the country and not in a position to make copies of lease documents, my social, and other "information" to prove what I was saying to be true.

My saviour is the fact that I have a private third party company that is managing the requests and they are keeping records of all actions taken on my behalf. The fact that I provided the company my personal information before departing the country was recorded and the CRA's are negligent for losing that information.

MY CRA was ordered unapproved while I was away shortly after I noticed something was wrong at that hotel. An alleged new line of credit was initiated by my existing bank through an alleged third party agent. The identity recovery folks contacted the bank in my absence and received instant confirmation that the third party company was not affiliated with them.

The trade line in question was deleted and together everyone was able to coordinate and National Bank. The bank denied the opening of the account, and I immediately sprung to action calling in the identity recovery team.

The team moved quickly, assisted getting police reports, filing with the FTC and handling a lot of the administrative "stuff" that I just don't have the time for because of my job. And by the way, I would lose my job if my credit tanked.

It isn't that I am necessarily Pro-Lifelock, but I do see value in having the administrative trail to protect myself.

What I don't like is that the CRA's have a conflict of interest when they provide similar services. The CRA's are very secretive and I am looking around (based on lack of cooperation from the CRA's and really bizarre behaviour) to ascertain how these company's screen their employees and what type of bonding or research is done into the prospective employee's background.

Any ideas?

 
At 8:43 AM, Anonymous Anonymous said...

Credit Bureaus need to be monitored! Why is it ok for them to sell our information? Our government requires that our information be turned over to the Credit Bureau in all government transactions. Why do the credit bureaus have such power? Why is it that all business and government, insurance companies, medical billing companies, every thing we do is reported to them. Who are they? Private industry? They are all set up to receive everyone's person information, I know that. But they are very flawed in that they do not care if the information is correct or not correct. They don't try to keep current information and just leave it up to the individual American to work to get their information correct and it takes months. I refuted a large claim against me by Home Depot with a hand signed note from the Manager of the store saying he agreed to comp the entire 8K job of flooring that a subcontractor unsuccessfully installed. The credit bureau would not remove it. I am a single parent out there trying to make a living. One month is crucial to working people as to whether they can get insurance or transportation. The Credit Bureau so far has never answered to anyone about their mistakes. They just say no without answering to anyone on what they do. I think they have a great deal to do with Americans not being able to spend. Amnesty at the Credit Bureau would be much better than stimulation checks and it would save the American Tax Payer. The credit crunch is caused by what started out as a precautionary method of deciding who was credit worthy. And now has turned into a large private business that is impacting our economy. I would venture to say more than 75% of people who are declined credit would actually pay off what they have bought, were they allowed to make purchases.I've never read anything against the Credit Bureaus. It's like they have free reign over all spending. All that is ever said about the economy is get your credit score up. People, we are in a recession. We need to allow business to be conducted. The credit bureaus are quietly making their money. They are not losing their homes, I bet. Now they are impacting employment the same way.Employers are checking credit scores! Do you see the impact that makes. Only those with good credit scores (decidedby a very partial concern will be able to go to work to pay off their family debt) It is not fair that they are not held responsible to Citizens of America, but rather big business. It certainly works for them. Who owns the four major credit bureaus.
What salary do they make. I like the company(Lifelock) that is impacting the credit bureau in such a way that they have to make comment. There is no other means of hearing from them that I know of. Unlike the American public, they don't seem to have to report to anyone for any of their mistakes or especially not mistakes reported about them in error. They just quietly take the money and the buying ability from everyone. Many people who are denied credit based on their reports are truly able to pay. But just like in the days of old (before retailers, government agencies, insurance companies and everyone were required to "report" even one month of hardship) farm famiies and auto workers and people from all walks of life, paid things out as they could. Credit was extended to people of quality even in bad times of the economy or during weather disasters and storms. Yes we need people to go to merchant and buy again, we need them to borrow. Lets have amnesty at the credit bureau and major regulations of what bean counters want to accomplish in regards to credit and lending. Successful business owners have always been generous and caring in the past to the citizens who pay for their goods. I say our rights are being abused by this transfer of our private information. Thank you for listening.
RightsGirl

 
At 3:15 AM, Anonymous Credit Bureau said...

Hi Awesome Post, news about good companies is always fantastic. love the posting.

 

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