It's All About the MONEY!

[Enigma]

http://phoenix.bizjournals.com/phoenix/stories/2008/03/03/story10.html?b=1204520400^1598367&ana=e_abd

Friday, February 29, 2008
LifeLock-Experian lawsuit could set legal precedent
The Business Journal of Phoenix - by Ty Young Phoenix Business Journal
Jim Poulin/Phoenix Business Journal
LifeLock CEO Todd Davis calls Experian's claim "meritless."
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The lawsuit between identity theft prevention firm LifeLock Inc. and a U.S. credit bureau is taking legal experts into new territory, potentially establishing credit reporting case law for years to come.

Officials at Experian, one of the country's three credit bureaus and holder of more than 230 million credit files, filed suit against the Tempe firm last week. They claim LifeLock violates the Fair Credit Reporting Act by posing as individual consumers rather than as a clearinghouse for fraud alerts. The lawsuit includes a litany of charges, using the terms "malice, oppression and fraud" to report LifeLock's business practices.

"I think it can and is likely to set a precedent for many years to come," said Joseph Cotterman, an attorney who heads Gallagher & Kennedy PA's commercial bankruptcy and creditor and debtor rights department in Phoenix. "There doesn't seem to be much middle ground for them to compromise."

There is little case law surrounding the Fair Credit Reporting Act. Those that have been decided are relatively small and do not extend beyond individual states. Cotterman said there has never been a FCRA-related case with two companies of this size and scope going at each other this way.

This makes the lawsuit itself more interesting, Cotterman said. While much of FCRA's wording is vague, the lawsuit may call into question the definitive nature of some of the law's components. Among those is the notion that an individual must file a fraud alert by "direct request," not through a third-party service.

Experian claims LifeLock violates this with every fraud alert it places. LifeLock, on the other hand, contends it is simply providing a service to its customers.

LifeLock CEO Todd Davis said the claim is "meritless" and an attempt to disrupt the fast-growing company's momentum. But what the lawsuit does not say is what really screams the truth, he said.

Davis claims Experian is losing money from its highly profitable marketing wing, which sells demographic information to companies that use bulk-mail marketing campaigns and other mass mailings. Through LifeLock's fraud-alert system, customer information is removed from the Experian data sets being sold to third-party marketers.

"They are making millions from selling consumer information," Davis said. "We're tired of companies collecting and buying people's contact information so they can make money."

For $10 a month, LifeLock bundles federal mailing list opt-outs, consumer fraud alert reporting and annual free individual credit reports. While these services generally are free to individuals, LifeLock combines them all and relieves clients from worrying about renewing fraud alerts, Davis said.

Experian officials claim their company "has suffered, and will continue to suffer, damage to its business reputation and goodwill and the loss of sales and profits" as a result of LifeLock's activities, according to the lawsuit.

Davis said these profits are directly related to Experian's marketing unit.

Experian is the only bureau that sells people's information, said Donald Girard, Experian's vice president of public affairs. The other two, TransUnion LLC and Equifax Inc., do not.

Experian officials said the company's marketing and consumer credit reporting units are completely separate. Lost profits stemming from fraud alerts do cut into marketing profits, but that is not the reason for the lawsuit, Girard said. Experian, along with the other two credit bureaus, helped the Federal Trade Commission draft the credit reporting laws that now buoy LifeLock's business.

"The two sides are not connected," Girard said. "Congress did not pass this law to create a business opportunity for a third-party, for-profit organization like LifeLock."

[roybean]

Interesting, and I was just watching a commercial about Lifelock.

[hannah]

There was a segment on one of the news shows about Lifelock a few months ago. Had something to do with the owner being a felon. I'll see if I can find it.

Lawsuit looks interesting though.

[Pale Rider]

Quote:

Originally Posted by Enigma "The two sides are not connected," Girard said. "Congress did not pass this law to create a business opportunity for a third-party, for-profit organization like LifeLock."

Neither did they pass it to allow Experian to make millions off of our private info.

[Enigma]

Quote:

Originally Posted by Pale Rider Neither did they pass it to allow Experian to make millions off of our private info.

Amen!

[Enigma]

Quote:

Originally Posted by hannah There was a segment on one of the news shows about Lifelock a few months ago. Had something to do with the owner being a felon. I'll see if I can find it. Lawsuit looks interesting though.

The Very Organized Hit Job On LifeLock

[hannah]

Quote:

Originally Posted by Enigma The Very Organized Hit Job On LifeLock

Yep, that was basically what the show said. I have a hard enough time without giving my personal info to someone that I know may be shady.

[Gib]

Quote:

Originally Posted by Enigma Experian, along with the other two credit bureaus, helped the Federal Trade Commission draft the credit reporting laws that now buoy LifeLock's business.

Talk about letting the fox into the hen house....

[JayinGR]

Quote:

Originally Posted by Enigma http://phoenix.bizjournals.com/phoenix/stories/2008/03/03/story10.html?b=1204520400^1598367&ana=e_abd Experian officials said the company's marketing and consumer credit reporting units are completely separate. Lost profits stemming from fraud alerts do cut into marketing profits, but that is not the reason for the lawsuit, Girard said. Experian, along with the other two credit bureaus, helped the Federal Trade Commission draft the credit reporting laws that now buoy LifeLock's business. "The two sides are not connected," Girard said. "Congress did not pass this law to create a business opportunity for a third-party, for-profit organization like LifeLock."

Thats why the FCRA sucks so bad.

[Depressed]

I wonder. If all of the savy consumers got together, writting letters telling them they do not have our permission to sell our information, will they then turn around to sue us for taking money out of their pockets??? While I would not use a service like LifeLine (the jury is out on their reputation) it is our right to protect our information so it should not matter that some of us are to busy working (extra hours to cover higher cost of living) and choose to use a service like LifeLine. As for me I will make the time as I prefer the hands on approach. So where do I send my letter???? I am more than willing to take some money out of their pocket even if I never get to see it/spend it.

[VexatiousLitigant]

Two things.

Lifelock isn't doing anything for you that you can't do quickly and free (minus the cost of postage).

One of the founders of Lifelock has a pretty questionable history regarding consumer credit.

No thanks. I don't really care who wins this one.