With identity theft, credit card fraud and Internet scams on the rise, many consumers are turning to third-party identity theft and credit protection services for relief. These services can provide the kind of protection that credit bureaus and credit card companies should have been providing all along. Leaders in the identity protection field include LifeLock, LoudSiren, TrustedID and Debix. Among the services provided by these companies is the placing of “fraud alerts” with the major credit bureaus, which obligate the bureaus to provide better fraud protection than consumers would normally receive.
Seemingly feeling the heat and fearing the competition, credit bureau titan Experian recently decided to sue LifeLock for helping consumers receive enhanced fraud protection. Experian’s main complaint is that LifeLock places fraud alerts in Experian’s databases on behalf of consumers, and that practice is costing Experian money. Specifically, Experian bases its complaint on the Fair and Accurate Credit Transactions (FACT) Act, which was made law in 2003. FACT states that a fraud alert can be placed “by 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 identity theft.”
The wording of the FACT Act seems plain enough to me, but Experian’s lawsuit whines that because LifeLock is a company, and not an “individual,” they should not be allowed to place fraud alerts on behalf of its customers. The lawsuit goes on to snivel that LifeLock has been placing fraud alerts on behalf of customers “who do not have a genuine suspicion of imminent fraud.” Because of these allegations, Experian has also accused LifeLock of deceptive advertising.
Well, excuse me, Mr. Based-in-London-England Experian, but it occurs to me that every person that has a bank account, credit card or Social Security number should have a genuine suspicion of eminent fraud. If you’ve read many of my past articles, then you’ve likely read the horror stories of about how massive amounts of sensitive, private consumer information are lost, misplaced, stolen or hacked on the Internet every day. Quoting IdentityTheftLabs.com, “We believe that 210 million exposed personal records in the last three years and over 20 million identity theft victims gives every American a reasonable suspicion.” They go on to note the fact that, even though credit bureaus are required by law to provide you with a free annual credit report, Experian has been fined by the Federal Trade Commission and ordered to re-word the Experian-owned “freecreditreport.com” website. Until the FTC clamped down, Experian had been misleading consumers by deceptively enrolling them in an $80 “credit monitoring” program so that they could instantly receive their “free” credit report, along with the same types of enhanced services that are also provided by — guess who — LifeLock. Experian also cleverly diverted consumers away from the legitimate “annualcreditreport.com” website, which gives consumers access to fast, easy and no-strings-attached completely free credit reports.
I believe that companies such as LifeLock provide a much-needed service to consumers trapped in the world-wide cycle of identity exposure and debt, which, it seems, is pretty much all of us. If Experian is allowed to squash the competition with ridiculous lawsuits, look for credit “services” to become more expensive, and ever more dangerous.