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Going Too Far for Customers?
The CEO of LifeLock guarantees that his company will protect consumer’s identities. He’s so sure that he gives out his own social security number on radio ads promoting the company’s monthly service to protect its customers from identity thieves who seek to steal their personal information and ruin their credit. How can he be so sure LifeLock can protect its customers? It uses several controversial methods to ensure its harder for thieves to get hold of personal information, and credit information provider Experian isn’t too happy about it. The company has filed suit against LifeLock for what it alleges are illegal practices that will ultimately hurt Experian’s customers.
In order to protect its customers, LifeLock automatically checks their credit reports (which every person is allowed to do once per year for free under law) and places a fraud alert on their account every 90 days (which every person is allowed by law to do). However, Experian accuses the company of unnecessarily placing the fraud alerts on millions of customers’ accounts, costing Experian money and potentially making the alerts less effective. It also says that LifeLock shouldn’t be allowed to profit off a service that customers could get for free.
However, Experian isn’t free from controversy itself. It runs Freecreditreport.com (not to be confused with the government-run Annualcreditreport.com). When Experian first started the site, it was sued by a number of states for deceptive advertising because it only gave out free credit reports to consumers who signed up for its Triple Advantage program, which charged a monthly fee. At the time the government accused Experian of charging customers for a service they could get for free (the same thing they now accuse LifeLock of).
How far should companies go to provide customers with the best service possible? If what LifeLock is doing is legal, is it ethical to tie up Experian’s systems and misuse its services? Does Experian have a leg to stand on when it comes to accusing a competitor of deceptive practices?
It would be funny if it weren't ironic that Experian is complaining about someone else's business tactics.
My Experian experience has been that they are the kind of company that cares little about the harm it causes, because it justifies the harm on the basis of its profits.