Experian vs. LifeLock: Who's being deceptive? You decide...

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(Updated below) Credit bureau Experian is accusing the identity theft prevention firm LifeLock, of deception and fraud. In the lawsuit, filed in U.S. District Court on Feb. 13, Experian contends that LifeLock's advertising is misleading and that the firm is breaking federal law in the way it goes about protecting consumers by placing our fraud alerts.

LifeLock CEO Davis, in an interview with MSNBC on Wednesday, called the lawsuit baseless and said that Experian is simply upset that his firm is challenging its business model.

"This lawsuit is not about helping consumers," he said. "They just want to make more money selling their data."
I'm outraged at the lawsuit -but not at LifeLock!

In my opinion...he's right.

This lawsuit isn't about helping consumers it's about money. Let's face it, Experian and the other bureaus don't give the impression they care about consumers and they don't appear to spend money or time creating solutions for us. Rather it's quite obvious they spend considerable money on advertisements for "free credit reports" that aren't free! Their radio and television advertisements, as well as an array of websites continue to guide consumers who are seeking their official 'free" credit report to a site owned by Experian that sells credit monitoring services.

Many consumers have no idea that the free credit report site being frequently advertised on television isn't the official site mandated by the government allowing consumers to obtain an annual cost-free credit report.

How would they know? Have you seen one public service announcement or one commercial giving out the correct website or toll free number?

The official site isn't "freecreditreport" it's -annualcreditreport.com. However, watch your spelling and carefully follow the instructions on the site or you may find you have been whisked away to an impostor site simply by misspelling the URL.

As reported by Privacy Rights Clearing House;

We recommend you order free reports by telephone or mail. A World Privacy Forum report released in July 2005 exposed hundreds of imposter web sites. The FTC filed suit against one imposter site and sent warning letters to many others. Some bogus sites lure you in with "free" offers, but just want to sell you products like credit monitoring services. Others are outright frauds that aim to steal your personal information. To read more about fake sites, visit the FTC.gov.

If you still prefer to order your free reports online, make sure you link to the only official web site. The safest way to do this is through the FTC's web site which includes more information --but remember, if you are asked for your credit card information, you've taken a wrong turn. The annualcreditreport (1 from each bureau) is free --your credit score is not.

Never visit a site you find through a search for terms like "free credit reports," "free credit scores," or "free credit checks."

Additionally, experts have warned that the annualcreditreport.com website may not be so consumer friendly as the privacy policy seems to indicate that by using the site you are agreeing they may sell your information to third parties.

What many consumers wouldn't know is that the FTC had to step in and tell Experian that their advertisements that claimed to offer "free credit reports" were confusing the public. The FTC's Complaint states in part that Experian doing business as consumerinfo;

"deceptively advertised and promoted its "free reports" at its "freecreditreport.com" Web site, without disclosing that it was not associated with the official annual free credit report program.
"Consumers paid the price for ordering free credit reports from freecreditreport.com," said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. "It's unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn't want in the first place."

It sounds like Experian is being a bit hypocritical.

For Experian to allege that LifeLock's services "constitute misleading advertising" -when we've all heard the "I'm dreaming of a number" commercials and little jingles that contain the words "free credit report" it appears phony and disingenuous at best.

I believe the credit bureaus continue to leave consumers out of the equation when it comes to providing solutions to fraud and identity theft. Rather, it appears they continue to be part of the problem. If the cra's did their job, research wouldn't prove that 1 in 4 credit reports are laced with harmful errors.

Rather than attacking companies trying to solve the problem, maybe they should consider joining those of us who feel more needs to be done to lessen the burden placed on consumers who simply want to maintain an accurate credit report.

Doesn't it make you wonder if it might have been LifeLock's recent "Strike Back" petition drive and campaign to defeat identity theft that sparked this lawsuit?

There are many lawsuits filed by consumers against Experian as well as against the other two credit bureaus. It would seem that their money would be better spent fixing their systemic problems so companies such as LifeLock were not needed.

More from the FTC website:

Marketer of "Free Credit Reports" Settles FTC Charges

"Free" Reports Tied to Purchase of Other Products; Company to Provide Refunds to Consumers

Consumerinfo.com, Inc., doing business as Experian Consumer Direct, has settled Federal Trade Commission charges that it deceptively marketed "free credit reports" by not adequately disclosing that consumers automatically would be signed up for a credit report monitoring service and charged $79.95 if they didn't cancel within 30 days, in violation of federal law. The settlement requires Consumerinfo to pay redress to deceived consumers, bars deceptive and misleading claims about "free" offers, requires disclosure of terms and conditions of any "free" offers, and requires the defendant to give up $950,000 in ill-gotten gains.

According to the FTC complaint, the defendant drove consumers to their www.freecreditreport.com and www.consumerinfo.com Web sites with radio, television, e-mail and Internet ads that promised free credit reports and a bonus - free trials of a credit-monitoring service. Ads made claims such as:

FREE! FREE! FREE! Get Your FREE Credit Report Online in Seconds!!!!
Click here to get a FREE copy of your online Credit Report Instantly!
And that's not all. . . along with your INSTANT credit report, we'll give
you 30 FREE days of the Credit Check Monitoring Service at no obligation.

If we didn't have to file lawsuits or spend years fighting to correct inaccurate information contained in our credit reports -LifeLock's services would not be of value. Experian continues to make us feel as though we work for free as a type of "quality control inspector"... monitoring, disputing and correcting our own information-for their profits. Correcting inaccurate information is a task that is frustrating, costly and can continue for a lifetime, especially if hit with an identity theft. The cra's product (our personal information) is sold over and over with very little, (if any) value placed on whether or not their product is deemed defective.

What usually happens when a product deemed defective continues to be sold to the public?

Any other product that was found to be harmful to consumers would be pulled from the market. The corporations involved would be held accountable and the product would be unavailable-at least until scrutinized and determined the product was no longer defective. The CRA's should be held up to the same standard as any other for profit Company.

Regardless how they rule our lives, they are not God -therefore, they should not be above the same laws we hold others accountable to. It's time the cra's step up to the plate and become part of the solution and not the problem! Selling us credit monitoring services is just another way for them to profit from something many of us believe should have been provided to us for free!

Experian's lawsuit appears to be not only disingenuous but entirely self-serving and destructive. If they win -we all lose.

UPDATE: Please note that this blog was written in 2008. My views on identity theft protection services have greatly changed, as did the services offered, the policies and less than transparent partnerships. In an effort to ensure these older blogs don't mislead readers, please take time to check the date of any blog relating to identity theft protection services. Anything dated pre-2012 that has not been updated, should NOT be considered as an accurate portrayal of today's informed opinions.

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