More on Experian vs. Lifelock

by Doug Pollack

There is a growing amount of legal commentary emerging in the discussion surrounding the Experian vs. LifeLock lawsuit. This week, Peter Bronson from The Union.com published an article titled "Business Law Bulletin: Experian vs. LifeLock Heats Up".

Relative to the false and misleading advertising issue, Mr. Bronson notes that:

"According to Experian's lawsuit, at least one Lifelock ad claims that the company's services make it virtually impossible for identity thieves to strike, but that fraud alerts are only effective against those particular types of fraud that require accessing a credit report. In other words, says Experian, Lifelock cannot protect against such forms of identity theft as an undocumented worker using someone's Social Security number to obtain a job; or against unauthorized use of a credit card."

It is interesting to see a credit bureau that advertises their credit monitoring services as a means to help deter identity theft relentlessly (who hasn't seen the FreeCreditReport.com ads on TV?) make the case for the inherent limitations in this area.

Mr. Bronson goes on to point out the ambiguities with LifeLock's famous $1 million guarantee:

"Lifelock does offer a $1 million guarantee that if a customer's identity is compromised, Lifelock will help restore the customer's credit standing and pay the cost of doing so. However, Lifelock's web site states that the guarantee comes into effect when a customer's identity is compromised "due to a failure or defect in our Service", a phrase that seems open to more than one interpretation. (If the service offers protection against only certain types of identity theft, does the guarantee only cover those specific types?)"

This is the first instance where I've seen someone dig into the specifics of this guarantee. The "service defect" provision certainly provides LifeLock with a get-out-of-jail-free card. Not to mention, given that it is the financial institutions who provide most of the financial fraud protection, how valuable really is a $1 million guarantee other than as a marketing gimic. I guess we'll all find out as this lawsuit unfolds.