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Fraud guardian uses 'unfair business practices', Judge rules

Fraud-prevention service LifeLock engages in unfair business practices because it violates parts of a federal law governing the safeguarding of consumer credit reports, a federal judge has ruled. The finding, by US District Judge Andrew J. Guilford of California's central district, came in a case brought by Experian, one of the …

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WhatWasThat?
Pirate

Personal Rep - Not a Company

So, what's to stop LifeLock from assigning a new class of employee, "Customer Service Personal Representative (Drone)", to its call center people? When someone calls in to subscribe, that call center person becomes that caller's "Personal Representative", all made official by the acknowledgement (and *limited* power of attorney agreed to) by the customer.

This means that the call center folks just have to sign the requests to Experian before they are mailed, probably in a mass printing done at the end of the day and mailed out that night.

And now that it has been decided by a judge that a "personal representative" must be involved, Experian has no grounds to fight against its ... winning(?) suit.

Tim Brown
Alien

And a fraud alert is what exactly?

From Experian's web site:

"Fraud alert messages notify potential credit grantors to verify your identification before extending credit in your name"

Er... 'scuse my niavety but shouldn't they be doing this anyway?

Paul Henry

This is some kind of a bad joke right??

We should not have to pay a third party to do this on the first place. What is needed is a class action law suit against the credit reporting agencies for not properly verifying the ID of the party requesting credit in the first place.

We do not have a problem with ID theft because of the Internet we have an ID theft problem because we simply make it to easy to extend credit.

The game for these guys is the lowest possible cost per transaction and anything that would make the transaction more secure impacts that cost - the rules of the game need to be rewritten.

Paul

Anonymous Coward
Flame

About time... now if only...

...it would mean an end to the LifeLock TV and radio ads.

While Experian isn't exactly a good guy in this story, LifeLock's basic business model is to charge its customers to "protect" them from a non-existent threat, while passing the costs along to everybody that uses credit, customer or not.

LifeLock operates by abusing a provision of the law that is supposed to protect people who have reason to suspect that somebody may be trying to get credit in their name. They charge people $10/month to request a lock under false pretenses, which costs the credit bureaus to process. And they, of course, pass the cost on to credit providers who pass it on to users of credit. Us, in other words.

LifeLock is basically exploiting the fact that -- like those companies advertising "free credit reports" -- it has far more money to advertise its services than the relevant government agencies have to educate people about what their rights are and what they can get for free -- or in the case of LifeLock, with three phone calls a quarter.

Henry Wertz

Exactly so...

Exactly so, I don't see this as a big inhibitor -- LifeLock can just tell you "this person will personally represent you in this matter" and they do it. If they quit you get a call (or e-mail, or whatever) letting you know who has taken over as your personal representative.

This is NOT an added cost to Experian -- it's the cost of doing business. They operate under the Fair Credit Reporting Act, and MUST honor these types of requests, period; it's real greasy of them to try (and succeed) weasling out of a legal requirement. They made almost $4 billion, and over $400 million in profit, the last year so it's not like these requests were going to "push them over the edge" into unprofitability.

graeme leggett

@Tim Brown

It seems that an "initial fraud alert" is a warning to be put on file that you think your identity might be comprised eg because you lost something with your details on it and it might have got into the wrong hands.

Presumably it expires after 90 days, because if you did lose your wallet and someone didn't rip you off in 90 days, then its never going to happen.

I guess these people who need it topping up again after 90 days are either very forgetful, or very paranoid. Your pick.

James O'Brien
Joke

@Tim Brown

Maybe because to do so would require more employees (money) and resources (money) and time (money) and to do so would require investment (money) of capital (money) and to do so would mean the shareholders (executives) wouldnt see a return on their investment (more money in their pockets.

I hate this society. Money money money money. Fuck money. At the risk of sounding like a communist, money is what causes the majority of the problems. Oh well. One voice in a sea of people wanting to be "rich" wont solve the problems. Im gonna go invest my money in more beer.

Anonymous Coward
Anonymous Coward

Re : Tim Brown

No no no no. You've got it all wrong.

If a financial institution lends someone millions of quids on the quite reasonable grounds that they _say_ that they are you. And said Financail institution doesn't do any checks (apart from asking "are you sure you're Tim Brown.") And they later find out that its all a big con job, ITS ALL _YOUR_FAULT!!!

Simple isn't it.

James Butler
Thumb Down

Doing For Others

Everything LifeLock does you can do for yourself for free. They do not "protect" your identity in any way ... they simply monitor various locations for signs that your identity has been compromised, and then tell you when it has been.

They claim they offer a $1Million guarantee regarding the protection of your identity, as long as the loss of your identity is related to something they have (not) done. However because they don't actually DO anything to protect you, they will never need to pay out their guarantee .. because they aren't DOING anything to reneg on!

Maybe it's useful to people who have no clue about how simple it is to mimic LifeLock's activities for free, and just want to spend $120 per year to have someone tell them when they have been victimized ... but it is useless until your identifying info gets broadcasted to the various black sites that trade in such data. If someone simply stole your wallet and started using your credit cards right away, while pursuing new cards of their own using your identity, LifeLock wouldn't know anything about it, and certainly could do nothing to prevent it.

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