Business

LifeLock is a service that aims to protect your personal information from ID theft for $120 a year and they back up their claim with a $1 million guarantee (discussed last week here).

What are some of the things they do to protect you? They order a copy of your credit report annually from the major credit bureaus. They opt you out of pre-screened offers of credit. And they put a fraud alert on your credit reports.

Of course, these are all things you could do yourself for free. And to their credit, after they mention each of these things on their website, they indicate you could do these things too for free but why bother with the hassle. (It frankly is so surprising to see this level of candor, that it makes MrConsumer suspicious that some Attorney General somewhere didn’t require this of them in the past for this company or a prior company.)

Now, as to their putting a fraud alert on your credit report, depending on the circumstances, this may or may not be kosher. Under federal law, only victims of ID theft or those who believe they are about to become a victim of fraud may place such an alert into their credit report:

“Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency described in section 1681a (p) of this title that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall— (A) include a fraud alert in the file of that consumer …”

So how in the world can this company represent to the credit bureaus that you have been victim or are about to be?

*MOUSE PRINT: Buried in LifeLock’s terms and conditions is this provision:

“18. … You additionally agree that you have a good faith suspicion that you have been or are about to become a victim of fraud or related crime, including identity theft, that you want to obtain fraud alerts under 15 U.S.C. § 1681c-1, and that you will notify LifeLock immediately if and when you no longer have such a good faith suspicion.”

Unless you read the fine print, you probably would not have known that you were being asked to attest to something that may not be true — that you are a current or imminent future victim of ID theft.

This bit of duplicity has not gone unnoticed. Just a few days ago, Experian, one of the big three credit reporting agencies filed suit against LifeLock for this very practice.