Experian vs. LifeLock - The Battle Begins

February 25, 2008

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It was inevitable that sooner or later the relationship between the Identity Theft Protection services and the credit bureaus would get put to the test, and finally the wheels are in motion for a showdown.

The Red Tape Chronicles is reporting that on February 13th, Experian filed suit against LifeLock saying (among other things) that LifeLock’s ads are misleading and out-and-out fraudulent, and they are abusing both the spirit and the letter of the Fair Credit Reporting Act.

Not Your Turn Yet

Experian is claiming that the way that LifeLock (and pretty much any provider) sets up fraud alerts is illegal.

Initial Fraud Alerts, they say, can only last for 90 days and can only be set when someones feels that they have been, or are about to be, a victim of identity theft. Since LifeLock sets it on request and renews it every 90 days on behalf of the client, this essentially creates a permanent fraud alert.

Given the millions of victims every year and new news stories every day about someone getting ripped off due to identity theft, I would say that there is a legitimate cause to be concerned for LifeLock’s customers. After all, if a payroll clerk somewhere sells my info, I am not going to know about it until an ID theft occurs. Why should there not be a proactive measure that I can take now?

Hi, I’m John Smith

Experian claims that LifeLock (and again, other providers) are breaking the law by requesting fraud alerts on behalf of individuals. This is pretty silly. The law even says that the alerts can be set by a consumer “or an individual acting on behalf of or as a personal representative of a consumer”. It seems pretty clear to me that in this case LifeLock (or an employee thereof) would be acting on behalf of the individual.

Deceptive Ads

Experian says that LifeLock’s ads are deceptive because they make it sound like the company’s services will protect against all types of identity theft. I will give them this one. LifeLock’s services aren’t going to do much if someone is using an existing credit card/loan or using their SSN to get a job.

Having said that, and as much as the whole “Here is my Social Security Number” thing is cheesy (especially since he was a victim after all), anyone who has ever sat through one of Experian’s FreeCreditReport.com ads will laugh at them calling LifeLock deceptive. That’s pretty rich.

Free As A Bird

An Experian EVP also complains that LifeLock is charging for something that is free (again, are you kidding me coming from them??). “There is inadequate disclosure to consumers that these services are free,” she said.

I don’t know about you, but it seems pretty clear from the “How LifeLock Works” section of their website that they are upfront that some of the stuff they do is free.

By and large Identity Theft Protection providers are charging for convenience. There are a lot of things that I pay to do that I could do myself if I really, really wanted to. But who has the time?

Divide and Conquer

One thing that I have been wondering is, why are they only going after LifeLock? Pretty much all of the providers (TrustedID, LoudSiren, etc.) do the same thing. Are they only bothering with LifeLock because it is the biggest? Or are they hoping to bring it down first and then force the others into submission. I have no idea but it will be interesting to see how this plays out.

Cat And Mouse

This is by far my favorite part of this whole thing. Check out the cat and mouse game that these two companies are playing and you start to see part of the reason why things are boiling over:

Experian also claims in the lawsuit that Lifelock is deceiving the credit bureaus. When it contacts a bureau and asks for fraud alert, LifeLock is “actively concealing that its requests are being submitted by a corporation.” Instead, LifeLock represents that it is the individual consumer, Experian says.

LifeLock also takes elaborate steps to circumvent efforts to block its calls by Experian, the lawsuit says.

LifeLock initially placed thousands of calls to Experian’s toll free number from Canada, causing the firm excessive telephone charges, it said. When those calls were blocked, LifeLock routed calls through a phone bank in Pennsylvania, which also was subsequently blocked. The calls were then routed through other phone banks, which Experian is currently unable to block, the lawsuit says.

Anyways, as you can expect, reaction has been mixed to this lawsuit with most people siding with LifeLock (does anyone like those guys?). Here is a sample comment that shows what Experian is up against from a public relations perspective:

I have been a LifeLock customer for the past 7 months and have been very happy with their services. My junk mail has been vastly decreased and my peace of mind has increased. Their services for $10 per month are worth it to me. THEY JUMP THROUGH THE HOOPS FOR YOU. Since the Govt. is so lame at protecting the consumer, I am happy to have LifeLock represent and protect me…because I cannot count on my Govt. to do it.

Where do you fall in this one? And welcome to Identity Thoughts!

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