LifeLock’s Fraud Alert Service Illegal
The controversy
Those of us who read the fraud blogs and follow the fraud trends are aware that LifeLock’s services have been battered to death. The company is controversial to say the least. The bottom line, up until now, has been that if anyone wanted to pay LifeLock $120 per year to do what they could do themselves for free, then so be it. Part rip-off, part service; at least they pretty much did what they said they would do when you shelled out $120. Now there’s more of a problem in River City.
Experian, one of the three credit reporting bureaus, filed suit against LifeLock claiming that LifeLock posed as consumers to place fraud alerts on files even when there was no suspicion of a problem. Experian successfully argued that third party alerts were not the intent of the 2003 Fair and Accurate Credit Transactions Act and that LifeLock was in violation of California law.
The bigger problem
If third party alerts are illegal, retailers, payment processors and even banks may not be able to provide that service for customers in the event of a breach. That’s a common occurrence. Although FACTA currently allows this, there may be a shift. If the shift occurs, the steps that the financial industry take in the event of a breach could change.
