Thursday, May 28, 2009

Judge Rules LifeLock’s Fraud Alert Service Illegal

Kim Zetter writes on Threat Level:

In a decision that has privacy advocates and others scratching their heads, a federal judge has ruled that LifeLock has been breaking California law for years by placing fraud alerts on its customer’s credit profiles.

The decision is a blow to the burgeoning identify-theft protection industry, and means that companies that experience data breaches may no longer be able to offer victims free subscriptions to such services — a standard damage-control tactic in recent years. Consumers can still place fraud alerts by contacting one of the three U.S. credit reporting agencies directly.

Bo Holland, founder and CEO of Debix, a competitor of LifeLock, called the ruling “dramatic and unexpected.”

“It causes a real shift in the industry,” he told Threat Level.

More here.


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