LifeLock Loses Legal Round, But Offers New ID-Protection System

Gallery.IdTheft2LifeLock, a prominent provider of identity-theft protection services, lost another fight in court with Experian, one of the three national credit bureaus.
U.S. District Court Judge Andrew Guilford has found that LifeLock should not be allowed to use its practice of placing fraud alerts on customers’ credit reports — at the very least until he rules on a permanent injuction against the practice.
Guilford made the ruling in August after LifeLock asked Guilford to reverse a preliminary ruling he made in May, based on new evidence. But the judge said that the information did not warrant reconsideration of his summary judgment.
Experian claimed in its lawsuit that LifeLock doesn’t have the legal authority to request fraud alerts on behalf of consumers. It asserted that the Fair Credit Reporting Act authorizes that credit bureaus honor requests for fraud alerts from consumers or their individual representatives. And it does not require the credit reporting agencies to place those alerts on behalf of corporations, such as LifeLock.
In May, Guilford ruled in favor of Experian, concluding that “there is a public policy against LifeLock placing such fraud alerts.” Experian has requested a permanent injunction that would prohibit LifeLock from requesting fraud alerts on behalf of consumers and from advertising that it can do so. The judge has yet to rule on the injunction request.
LifeLock is also a prominent competitor of ProtectMyID.com, an Experian company that offers similar ID-theft monitoring services.
After the second ruling by Guiford, LifeLock made public a new system to replace its fraud alert placements with the credit agencies.
“This new system, which replaces fraud alerts,” LifeLock said in an emailed statements to its customers, “is better because it offers you the benefit of real-time protection in some instances, and broader because it identifies identity risks beyond the scope of fraud alerts.”
LifeLock said its new system:

  • Uses more sophisticated and scientific algorithms to spot identity fraud; 
  • Mines more data sources than the credit bureaus. These additional sources include data from many retailers, banks, mortgage lenders, utilities, and auto lenders; and 
  • Examines patterns over time across this network to help predict future identity risks and the vulnerability of members.

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