LifeLock Lawsuit

LifeLock Inc., an identify-theft protection company, has been sued for breaking the law and defrauding customers. LifeLock says it has approximately 1.5 million customers who pay a $10 a month fee to protect their credit against theft. For that fee, the company checks the customer’s credit report with major credit bureaus. The company then provides customers with alerts (email, postal, or phone) when their personal info is being used to apply for credit. The company removes customers from pre-approved credit offers and sends the customers their credit reports every 12 months. It also provide a service to cancel all accounts if the customer’s wallet is stolen.

To prove the service worked, CEO Todd Davis televised a commercial in 2005 in which his personal social security number, which was protected by the service, was shown on screen.

Many critics charges that LifeLock was charging customers for a service that was offered for free by the major credit bureaus – Experian, Equifax, and TransUnion. People who believe they have fallen victim to ID theft can ask that alerts be sent from these credit bureaus for free.

Experian filed a lawsuit against LifeLock in February 2008. The lawsuit stated that the Fair Credit Reporting Act allows only for individuals to set the fraud alerts, not companies such as LifeLock. Experian stated that when LifeLock sets a fraud alert, it costs them money because they must in turn contact the other two agencies and mail notices to consumers. It believes that LifeLock’s fraud alerts clogs the system and prevents it from working as it should.

Last May, the judge in the federal lawsuit, Andrew Guilford, ruled that LifeLock fraud alerts, which are the cornerstone of its services, are illegal. LifeLock is challenging the decision, stating that their services offer a convenient way for customers to manage alerts. Davis likened it to changing your oil – you can take the time to do it yourself or have someone do it for you. Since the ruling, both Experian and Equifax have stopped accepting fraud alerts from LifeLock. However, TransUnion is still accepting them and when the LifeLock alerts are sent to them, it are required to forward the alert to the other two bureaus.

Other lawsuits filed against LifeLock concerns what some see as LifeLock’s misleading loss coverage policy. One of their commercials states “If anything happens for any reason while you’re a client of LifeLock, we will cover all losses and all expenses up to $1 million.” However, the terms and conditions state that this doesn’t cover actual losses by the customers, but the hiring of a third party to clean up their credit after the theft.

13 Responses to “LifeLock Lawsuit”

  1. Teri Says:

    You should update your blog with the final court decision.

    I’m pretty sure Experian settled their suit with LifeLock for an undisclosed amount after the final ruling from the judge.

    I’m also pretty sure LifeLock has ceased placing fraud alerts.

    There are still pending class action lawsuits in several states which you might want to provide an update to your readers.

  2. katie Says:

    Thanks for the information Teri.

  3. Nellie Bly Says:

    Hello Katie,

    You are on the right track. Yes, Experian and Lifelock settled, but the bottom line is that Lifelock was barred by the court ruling in Oct. 2009 from using its original process of illegally placing fraud alerts.

    Keep up the good work.

    Nellie

  4. mike Says:

    so what is the result, should we stay wt this company or use a better service, is there any better alternative??? advise.

  5. Ted Says:

    So given all of this, is Lefelock still operating as before?
    Who would be a good replacement for this coverage?

  6. Angelo Says:

    I would like to know the answer to the above question, and I am sure most people would like the same. If this is truly a waste of money please tell us..

  7. Ron Says:

    Mike, there is an alternative! A very good one! Check out my website.
    The company I represent guarantees in writing 100% restoration. They have licensed investigators waiting to help you and are backed by Kroll Background America Inc.
    Contact me if you have questions! I have had this for about a year now and it is wonderful!

  8. Jarvis Says:

    Lifelock has sent me a ten dollar check as settlement.

  9. Ripped off Customer Says:

    I was a customer of Life lock and yet my credit card was duplicated and charged. The credit card company dealt with this fradulent charge. When LifeLock was contacted and mentioned. They claimed this is not Credit Card Fraud.
    This instance in my book is a credit fraud. I did not get an alert from them.
    This is a breach of contract.
    Any words of advise.
    Thank You
    Sincerely Ripped off Customer

  10. Rick Says:

    Experian is the same service. They check for address changes, bank changes, new credit applications, etc. I went to an island resort and used my credit card. No word fro experian about this. They said that has to be arranged with each individual credit card company. Steal your money, nope, these agencies do not check for that. Change information about you, add credit lines or bank account changes, yep, they do that.

  11. yoichi takahashi Says:

    i believe lofelock should reimburse me for my membership due to no service or product.

  12. Dan Says:

    My credit card numbers have been stolen 3 times. In all cases, the card company caught the problem promptly with no notice from Lifelock. Now they are frequently sending me alerts to call my card company and cancel my cards because they found my card numbers exposed on fraudulent web sites.
    THIS HAPPENED 3 TIMES within 30 days. Meanwhile, I can’t get in touch with them to sort out the threats. Right now I have the same problem again. In the past, all of the alerts have been for cards cancelled by my card company-sometimes years ago.

  13. Clutch Says:

    Wait a minute, you all did not understand Experian, according to this blog: Experian stated that when LifeLock sets a fraud alert, it costs them money because they must in turn contact the other two agencies and mail notices to consumers. It believes that LifeLock’s fraud alerts clogs the system and prevents it from working as it should. So, therefore Experian has a security fault because it can’t work properly when there is too much traffic. So, why would you trust Experian to have any of your information correct if it is still working on an outdated system?? And, how can you trust them with your information if anyone can call and make a wrong complaint about your credit debt and not check. And why would you trust them if the company is so lazy to as not contact the other two agencies to stop any kind of fraud on your credit report. That just goes to show you how lazy these companies are and don’t care what is reported against you. They are there to let other buisnesses know the history with your credit and are paid by these big credit card companies. Not you or your credit. They don’t give two cents about your credit because you are not paying them. Especially now that they have to give you a free credit report annually if you ask for it. All 3 major credit reporting agencies have to do this by law. So, now they have to let you know for free when you used to have to pay for it. So, if they are not making money off of you why care who puts a bad mark on your credit report and why bother alerting not only the other two companies but the proper athorities to catch the ID thiefs???? So, Lifelock got sued for making a company do their job??? This is truly backwards. I would be suing all three major companies for deflamation and every other thing that I could so as to make them do their jobs. If you are for these companies and believe they are right in suing a company that is trying to protect YOUR CREDIT…..then you are more screwed up than those companies. You need to go check yourself and you deserve to be put into debt by thiefs.

    clutch
    El Paso TX

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