Magazine article American Banker

LifeLock Says TransUnion Pact Vindicates Its Model

Magazine article American Banker

LifeLock Says TransUnion Pact Vindicates Its Model

Article excerpt

Byline: Daniel Wolfe

LifeLock Inc., which places fraud alerts on consumers' credit reports for a fee, says its pact with the credit bureau TransUnion LLC shows that its controversial business model is gaining acceptance.

The Tempe, Ariz., company has had a contentious relationship with another bureau, Experian Information Solutions Inc., which sued LifeLock in February for what it called an abuse of fraud alert systems.

Todd Davis, LifeLock's chief executive, said Wednesday that the TransUnion deal, which created an electronic connection for communication with the bureau, is "the foundation of an industry change within the credit bureaus" in their dealings with companies like his.

"It really has, for the first time, aligned a credit bureau with a company like LifeLock," he said. "TransUnion has seen that the industry is changing."

Consumers pay LifeLock to give them annual credit reports and to place and renew 90-day fraud alerts on their reports at the three major bureaus. Both services are available directly from the bureaus for free. Until last week LifeLock typically placed alerts through the same toll-free number the bureaus offer consumers for this purpose (the Arizona company is granted a limited power of attorney by the consumer).

In its suit, Experian called this tactic "posing as the consumer." It also complained about the costs to the bureau of continuously renewing fraud alerts, which Experian argued were meant to be used only when a consumer believed an identity theft was imminent.

The TransUnion arrangement addresses some of the costs to bureaus of handling alert requests, Mr. Davis said.

In the new system, which took effect Dec. 12, all requests for fraud alerts are placed electronically. TransUnion sends the confirmation directly to LifeLock instead of mailing it to the consumer. …

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