Lifelock's Lost Combination

Court: Lifelock Using 'Unfair Business Practice' -The Red Tape Chronicles

Back in April 2008, APRPEH posted: Lifelock Getting Picked. At that time, Lifelock and its over-exposed CEO Todd Davis was at the beginning of a slew of legal issues. Well finally, the Experian case may have hammered the first nail into the coffin of Lifelock. According to the above story, Lifelock's procedure of proactively placing fraud alerts is an "unfair business practice". U.S. District Judge Andrew Guilford of the Central District of California ruled that

"Experian clearly incurs costs each time it must process a fraud alert made by LifeLock. These costs include the costs of allocating Experian’s electronic resources and employee time, plus the maintenance costs of Experian’s toll-free telephone number and Web page used to accept fraud alert requests," he said. "Experian also incurs postage and printing costs in mailing disclosure letters to each consumer on whose behalf a fraud alert is requested."

As was pointed out in the article, Lifelock will continue to place 90 day security alerts either with Trans Union or Equifax which pursuant to the Fair Credit Reporting Act, will also be automatically activated with Experian too. The big question is whether or not Trans Union and/or Equifax will press the issue and request Lifelock to stop automatically placing and renewing security alerts as well. Or, will either Trans Union or Equifax cut a deal with Lifelock? If I were forced to guess on this, I would expect both Equifax and Trans Union (which has worked with Lifelock in the past) to cut a deal provided there is adequate financial reason for the bureaus to do so. Lifelock claims that if they are prevented from performing their primary offering of automatically renewing security alerts they will continue to provide other services.

Lifelock's other services, besides the security alert include an internet privacy scan service and "Wallet Lock" which amounts to someone asking you, with apologies to Capital One, "Whats in your Wallet?" in the event you lose it and "help you contact each credit card, bank or document issuing company, cancel your affected accounts and complete the paperwork and steps necessary to replace your lost documents, including your credit/debit cards, driver's license, social security card, insurance cards, checkbook - even travelers checks...". Plenty of other companies offer internet scans and I suppose if you are not near a computer it is helpful to have someone look up telephone numbers and possibly conference call you in to the customer service of your credit card issuer.

Despite Lifelock's tremendous advertising effort, the product has always been lacking substance. As a result of this, Lifelock entered the business world with a guarantee and promise which they could never keep. While the product expectations, after much criticism were finally revised to more realistic levels, the question of why purchasing the coverage remained. The question now is still pressing. While the bureaus may force Lifelock from performing automatic security alert renewals, the bureaus would most certainly fail in an attempt to prevent consumers from doing the same proactively. Why continue to pay $10 a month for internet scanning and "Wallet lock"?

What is true is that other companies in the business of providing security services to consumers, those who provide honest and useful services to consumers, will read this story with a smirk. Lifelock's history of high-flying promises and service guarantee, both of which have been, in my opinion a stain on the industry coupled with the high profile advertising, - are not enviable but embarrassing. The most important question is what will all of our favorite radio talk shows do if Lifelock stops its radio advertising campaign?