Saturday, May 24, 2008

Open Letter to Ron Lieber

Dear Ron,

A month ago Experian sued Lifelock, and soon after some enterprising class action attorneys filed their own lawsuits. The lawsuits certainly make some disparaging claims about Lifelock. Since we at Lifelock know the claims to be false, we satisfied ourselves to gracefully wait for our day in court to present the compelling evidence, even though we expected the plaintiffs to sling mud at us in the meantime.

And sure enough, eager for a juicy story, a parade of journalists (and I use the term generously) lapped up the mud, seizing the opportunity to disparage a successful business (always an attention grabber). But what surprised me today is that you--a New York Times columnist--joined the lynch mob, and did so in a particularly naive way. Such fluky foolishness hurled from the bastion of good journalism demands a response.

The image “” cannot be displayed, because it contains errors.In today's column on Your Money, you follow the herd in reporting Experian's claims as though they were true. You imply that Lifelock's service doesn't work because our CEO is one of the several dozen Lifelock customers (out of a million!) who once had to resort to our service guarantee for protection when a lender screwed up. (You do acknowledge that the CEO's single $500 exposure came after a year of publicizing his social security number on radio and TV.)

But then you add some original analysis, distinguishing yourself as a trustful friend of Experian:

"And if the alert repeatedly fires off false alarms, forcing creditors to constantly double-check the identities of LifeLock customers who have never been victims of fraud, it is possible that those credit issuers will pay less attention to them. Experian is so worried about this, along with other issues, that it has filed suit against LifeLock."

That is so sweet! Those kind-hearted execs at Experian were so concerned for consumer privacy that they launched a legal campaign to shut down Lifelock. That's just the sort of philanthropy we have come to expect from a fine credit bureau like Experian (who just reported $4 Billion in revenue last year primarily from selling consumer data). Someone should give those darlings a medal!

Unless... neah, there couldn't have been another motive to sue, could there?

Experian's juiciest market is the community of spammy direct marketers who push pre-approved credit cards on our debt-junkie nation. These loan sharks are so busy, er, serving the public that they can't bother themselves to verify the identities of the people to whom they're sending all those credit cards. (Who has time for this?) So naturally, they won't buy credit reports "crippled" with fraud alerts. Perhaps then, as a New York Times reporter, you might suspect that Experian is just a wee concerned about their $4 billion share of the industry.

And if that isn't motive enough, consider that Congress had to pass a law forcing the credit bureaus to issue fraud alerts. Obviously Experian doesn't want the expense and hassle of accommodating these consumer requests. (Again, who has time for this?) But now, thanks mostly to Lifelock, fraud alerts are common, and Experian is forced to actually incur the expense that Congress mandated. Shouldn't that motive also intrigue the Times?

Not only was your inference naive, but your basic point about the false alarms is also wrong. A fraud alert is not an alarm--it is a process check. And not even a double-check, as you call it, but the only one in the process. Don't we want lenders to verify the identities of ALL their applicants, even those not already reported as victims?

You conclude that Lifelock's service isn't worth $10 a month because you can simply protect yourself by following these 10 easy steps:
  1. Mail all three credit bureaus a letter and pay each one a fee to issue a credit freeze on your account. (Oh, and you forgot to mention that the letters have to be certified.)
  2. Anytime you get a new job, or credit card, or a cell phone, or a mortgage, etc, first call the credit bureaus three days in advance, give them your password, and pay a fee to lift the credit freeze. (You'll also need to do this on your way to the hospital if you ever need to be admitted.)
  3. In some states, call the bureaus again and pay a fee each time to restore the credit freeze.
  4. Replace your mailbox with a secure mailbox (on sale now for only $445).
  5. Contact all your service providers and ask them for online accounts instead of paper bills (because no one can ever get to your online data).
  6. Buy a shredder (they range in price from $100 to $800).
  7. Every day shred all your mail. (Who has time for this?)
  8. Lock up your social security card.
  9. Stop carrying a checkbook. (Er, isn't that a bit inconvenient?)
  10. Keep an eye on any relatives having financial difficulties. (Really, it's what you wrote.)
Thank you, Ron, for demonstrating just how valuable Lifelock's service really is!

But please tell me: do you still think that Experian is sincerely acting openly in the consumer's interest, or furtively in its own? Who's the real villain in this story? If I have given you cause to re-consider, I hope you'll follow through in print.

Yours truly (and you can call the number on my fraud alert to check),
David Cowan

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