Feeds

Fraud guardian uses 'unfair business practices', Judge rules

LifeLock encroaches on Experian operation

The Power of One eBook: Top reasons to choose HP BladeSystem

Fraud-prevention service LifeLock engages in unfair business practices because it violates parts of a federal law governing the safeguarding of consumer credit reports, a federal judge has ruled.

The finding, by US District Judge Andrew J. Guilford of California's central district, came in a case brought by Experian, one of the top three credit reporting services in the US. The lawsuit claims LifeLock costs Experian millions of dollars every year by bombarding it with calls on behalf of customers who have signed up for a $10 per-month service.

The calls demand Experian place what's known as an initial fraud alert in the customer's file as required under the FCRA, or Fair Credit Reporting Act. LifeLock renews the request each time the alert expires, which is 90 days after it was last put in place.

Experian has long argued that provisions of the FCRA bar LifeLock from making such calls on behalf of customers and that to claim otherwise is misleading. Instead, such calls can only be made by a personal representative of the consumer. Last week, Guilford, who is hearing the case, agreed.

"Under the clear terms of the legislative history, any request for a fraud alert 'must' be made by 'an individual,' and not by a company like Lifelock," the judge wrote. "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 webpage used to accept fraud alert requests."

It's worth noting that Experian offers fraud-prevention services of its own that directly compete with those of LifeLock. That arrangement is especially unpleasant when you consider that it's in large part due to the laxness of Experian and the other credit reporting services that consumers are threatened in the first place. Rather than giving us more control over how and when our detailed portfolios are turned over, Experian offers a paid service to effect pretty much the same thing.

Not that plenty of other companies don't offer similar fee-based services.

LifeLock chief executive Todd Davis downplayed the effect of the ruling, saying it didn't affect reports his company made to other credit reporting services. Those services, in turn, are required to share alerts with their competitors, so it's a fair bet LifeLock-filed alerts would end up on Experian's files anyway, he told MSNBC. ®

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
HIDDEN packet sniffer spy tech in MILLIONS of iPhones, iPads – expert
Don't panic though – Apple's backdoor is not wide open to all, guru tells us
Mozilla fixes CRITICAL security holes in Firefox, urges v31 upgrade
Misc memory hazards 'could be exploited' - and guess what, one's a Javascript vuln
BMW's ConnectedDrive falls over, bosses blame upgrade snafu
Traffic flows up 20% as motorway middle lanes miraculously unclog
LibreSSL RNG bug fix: What's all the forking fuss about, ask devs
Blow to bit-spitter 'tis but a flesh wound, claim team
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
Don't look, Snowden: Security biz chases Tails with zero-day flaws alert
Exodus vows not to sell secrets of whistleblower's favorite OS
Researcher sat on critical IE bugs for THREE YEARS
VUPEN waited for Pwn2Own cash while IE's sandbox leaked
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.