Another law suit filed against Lifelock identity theft protection services in West Virginia

Despite all the publicity that Lifelock continues to do well, a third class action has been filed against them for misleading advertising in West Virginia.

From the PR Newswire release:

Marks & Klein, LLP today filed its third class action lawsuit against LifeLock, Inc., a provider of identity theft protection services, and its CEO Richard "Todd" Davis. The lawsuit was filed in the Circuit Court of Jackson County, West Virginia (Docket No. 08-C-69), on behalf of Kevin Gerhold of Falling Rivers, as well as all other LifeLock subscribers in West Virginia.

This follows similar class actions filed in New Jersey and Maryland.

"The lawsuits allege that LifeLock and its multi-million-dollar advertising campaign provided false and misleading information about the limited level of identity protection the company provides, and failed to warn them about the potential adverse impact the company's services could have on their credit profiles," according to the press release.

Additionally, the release alleges that Lifelock CEO, Todd Davis has been a victim of identity theft multiple times since using his SSN as a marketing tool to sell the service.

So far only one instance of this has been reported. Here is what I wrote about it in a previous post about pending litigation between Experian and Lifelock:

Shortly thereafter, CEO Todd Davis made headlines when he organized a "posee," complete with film crew to go after the person, who stole his identity to get a loan. The identity thief in question was described as mentally disabled by the authorities and the charges were dropped because of the questionable tactics used, referred to as coercion.

So far as Lifelock not protecting people from all forms of identity theft, as alleged in all three of these actions, I offered my speculation (opinion) on what that was referring to:

Another reason there is no way to guarantee protection is that not all identity theft shows up on credit bureaus. Some examples of this are in cases of medical benefit fraud, employment fraud, government benefit fraud, some forms of check fraud and last, but not least, when it is used to commit crimes of other than a financial nature.

The press release indicates that other law suits are being considered in other States.

An item of interest not disclosed in all the other actions was that a woman had her stolen debit card used to purchase identity theft services from Lifelock:

Beyond the charges leveled in the Complaints, lead counsel Paris related the story of a Wisconsin consumer who contacted the firm regarding her accidental experience with LifeLock. "Her debit card was stolen and the thief had the audacity to use the card to buy a subscription to LifeLock," he noted. "Most disturbingly, LifeLock issued the subscription to the thief in the thief's name, clearly failing to verify the appropriate information."

I guess the person, who did this believes in protecting their own identity, at least, as long as, they aren't paying for it, themselves?

The services offered by Lifelock aren't much different than a lot of other services being offered by other companies. This has often led me to wonder if the actions against Lifelock are only the beginning?

The identity theft industry, which is growing at a double-digit rate, has attracted a of start up companies and it can be difficult for the consumer to determine exactly what they are paying for.

Most of the experts (not selling services) agree most people can fix their identity for free, and in the long run, they might do a better job of it, themselves.

If someone were to do this, a good place would be the FTC's Identity Theft page. Other decent free resources are the Identity Theft Resource Center and the Privacy Rights Clearinghouse.

Trans Union and Equifax will offer a nationwide credit freeze at a cost

It appears that both Trans Union and Equifax will be offering consumers the ability to freeze their credit, albeit for what some consider too much money. Thus far, Experian remains undecided, whether or not, they will follow suit.

Martin Bosworth (Consumer Affairs) put together a nice read, which explains the new service being offered by two of the three (major) credit bureaus:

In a surprise reversal and a major win for consumers, the Trans Union credit bureau announced that it would offer consumers the ability to "freeze" their credit files in all 50 states in order to protect themselves against identity theft and fraud.

The service will be available in the 11 states that do not already have credit-freeze laws, costing consumers $10 to set the freeze and $10 to unlock it, and will "meet or exceed the requirements" of states with existing freeze laws.

Perhaps, the credit bureaus are giving into laws already enacted in a lot of States, and have decided to make a some revenue on what is quickly becoming mandatory? More from Martin's article:

Thirty-nine states and the District of Columbia already have laws in place enabling consumers to freeze their credit, with varying rules and costs for usage. The credit and financial industries have aggressively lobbied against credit freeze laws, claiming they would reduce the availability of credit and discourage shoppers from making big-ticket purchases due to the time spent unlocking a credit account.

Efforts by the credit industry to push weaker national credit protection laws that would preempt state law stalled out in Congress. States such as Utah have passed laws enabling citizens to freeze and unfreeze their credit accounts in as little as 15 minutes.

Martin quoted one of his counterparts at Consumer Affairs, Gail Hillebrand as bringing up a very valid (my opinion) point:

If the bureaus have the technical means to enable instant locking and unlocking of credit, they should not be charging high fees to use a service that can be turned on and off in minutes.

After all -- there are many who believe, the credit bureaus, who make a lot of money by selling the information they compile -- are partially to blame for enabling what has become a major concern (identity theft).

Although this is progress, I would much rather see effective laws passed in all 50 states, or a "consumer friendly" one passed in Congress.

Excellent read from Martin, here.

Here is a previous post, I did regarding personal information being sold by credit bureaus:

How does a telemarketer get your unlisted number?

Update: Experian joined ranks and is offering this service now, also. Washington Post article on this, here.

How does a telemarketer get your unlisted number?

Ever get the idea that the credit bureaus enable a lot of problems, we now face with data-breaches, identity theft and the ever increasing loss of our personal privacy?

One of the main ways they make money is by selling your personal and financial information.

Read a good one on Pogo was Right (WE HAVE MET THE ENEMY AND HE IS US):

Terry Wyatt called his mortgage broker one morning about refinancing - and within hours began getting calls from other brokers and lenders he's never heard of.

... So how did brokers and lenders as far away as New York and Florida know - and know so fast - that Wyatt wants to refinance? Thank the credit bureaus.

When a lender or broker checks someone's credit report, it signals that person is in the market for a mortgage or to refinance. The credit bureaus turn around and sell that contact information to others in the mortgage business looking for leads.

Source - L. A. Times

PogowasRight is a good read for anyone interested in keeping up with privacy issues.

One way to stop the number of times your information is sold is to "opt out."

Information on how to opt out from unsolicited credit offers from places you already do business with, here.

Information on how to opt-out from places you don't do business with, here.

If you do not opt-out with places you already do business with and respond to their privacy notices (interesting way to classify them), they can and will sell your information. Of note, some of these notices are hard to respond to, or even understand what they actually say.

Here is a post, I wrote, which explains this further:

Warning if you don't open (and respond) to snail mail from American Express, they will sell your personal information!

You can opt out from telemarketing calls (one of the end results of your information being sold), here.

Ask Eric if there is "Zero Liability" in Identity Theft

Sometimes to understand what an identity theft victim is faced with you need to hear about it from a person, who has actually experienced it.

We live in a world where our information is gathered, sold and not protected very well. Meanwhile, there seems to be an army of fraudsters compromising credit issuers, who issue credit without checking very carefully.

Then there is the advertising, which claims that their financial products have a "zero fraud liability."

The Boston Globe did an interesting story that shows the liability innocent people face when they become identity theft victims.

Beth Healey writes:

Eric W. Carroll's credit report says he has a home in Florida, a wife named Katrina, and a pile of unpaid bills.

He first learned this when a debt collector called him in 2002, dialing his apartment in Bridgewater, yet asking for an Eric W. Carroll from Avon Park, Fla. Carroll insisted there was some mistake: He was not married, and he had never lived in Florida.

Nearly five years later, collectors are still hounding the wrong Eric Carroll.

Boston Globe story, here.

And even though Eric seems to have done all the right things, he seems to still be suffering.

There is no zero liability for identity fraud and we need to stop "sugar coating" the true impact it has on individual people.

Here are two places, I've recently "blogged" about where people can voice their opinion to people that can make a difference:

Tell it to the Identity Theft Task Force

Consumers Union Calls for Congress to Protect People's Personal Information