Experian Sues Lifelock For Violating The Fair Credit Reporting Act


Most of us have probably heard or seen the commercials from LifeLock – the owner gives out his social security number without fear because he is protected against identity theft. For the curious, his social security number can be found on the website. Rush Limbaugh advertises the service. Apparently LifeLock now has about 700,000 customers who pay about $10 per month. So what’s the problem? For one, Experian has now sued LifeLock.

According to Andrew Johnson of The Arizona Republic, Experian is claiming that “LifeLock is violating the Fair Credit Reporting Act by signing up its customers for fraud alerts and removing their names from direct mailing lists.”

Here are several more interesting quotes from this good story:

Experian claims that under the Fair Credit Reporting Act, the 90-day alerts are intended for consumers who believe they have become the victim of fraud or will likely become a victim.

The act also stipulates that only consumers or representatives – such as a parent – can sign up for fraud alerts.

Experian argues that by continuously enrolling its customers in fraud alerts, LifeLock is costing credit-reporting agencies money.

Furthermore, Experian also contends that LifeLock does not do enough to let consumers know that they could obtain many of the services it offers on their own for free.

“LifeLock is leading consumers to believe that the service it is providing is something consumers couldn’t do themselves and they have to pay a fee for what is a legal right under federal law,” said Peg Smith, executive vice president in Experian’s Costa Mesa, Calif. office. “We believe what’s happening here is LifeLock is not providing adequate disclaimers to consumers about the fact that these are free for consumers who are truly victims of fraud.”

Just because something can be done for free doesn’t mean its wrong to pay for it – I could do my taxes for free but yet I will pay a CPA to prepare them. That sounds like a bogus argument from Experian. Now what does resonate as true is that LifeLock is costing Experian money. That is the only thing that we have found in numerous suits against Experian, Equifax, Trans Union, and Choicepoint (credit reporting agencies) that will get their attention. The more people that opt out of the mailing lists, the fewer names the agencies such as Experian have to sell to companies who want to bombard us with offers and advertisements.

I don’t know if LifeLock is violating the Fair Credit Reporting Act like Experian claims but I do know it is noteworthy that Experian claims this. I’ve never seen Experian agree or even hint that it had ever seen the Fair Credit Reporting Act violated – every time we sue Experian for this it claims there is no violation and it has never seen a violation. So, perhaps progress is being made by the means of LifeLock – annoying commercials and all….

Update – just saw this post by Denise Richardson on this issue – good stuff to read by clicking here.

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