Over a year ago, I blogged on the lawsuit between Lifelock and Experian. Well, Lifelock is still in business and so is Experian. Both companies are making money, and both companies are still fighting in Court. Why? The bottom line is millions of dollars in profits. Whose profits? Both companies.
After the lawsuit was filed, both companies went around beating their chests about who was right and who was wrong. Now, in the first major movement in the case, the Judge has granted a partial summary judgment for Experian stating that Lifelock was placing fraud alerts on credit reports illegally. Here is how the game works. If a consumer is afraid of identity theft, they can contact any number of companies who specialize in fraud protection. Lifelock claims to be the industry leader. We have all seen the commercials with Todd Davis who puts his social security number on the side of a truck and parades it around a busy city.
But don’t worry, he is protected because he has Lifelock. So, for $10 per month individual consumers can have the same kind of protection. The principal is simple. Lifelock‘s business model is pretty straightforward. They protect consumers by putting fraud alerts on the client’s credit report. Consumers can actually do this themselves. In other words, consumers do not need one of these services.
So now, the Judge has granted a partial summary judgment in favor of Experian. The Judge held that based upon a plain reading of the FCRA statute that the placing of fraud alerts by consumers is ok, but should not be done by corporations. While this may seem like a significant blow to Lifelock’s business model, it probably won’t be the end of the war. There is a lot more to come on this issue.
