While the heavyweights battle, brokers can be great crusaders against ID theftTerry W. ClemansExperian, LifeLock, identity theft, fraud alerts
In February, Experian, one
of the three national credit reporting agencies (and a partner of
First American CREDCO), filed a
suit against LifeLock, a provider of identity (ID) theft prevention
services. LifeLock is the
company with Chief Executive Officer Todd Davis, whose Social
Security number is 457-55-5462. Many LifeLock advertisements
prominently display Davis' name and social security number, which
he claims is the actual number. In print advertisements, there is
an asterisk (*), which indicates a disclaimer (written in fine
print) at the bottom of the page, advising readers to avoid giving
out their Social Security number unless absolutely necessary. That
is good advice, especially considering that it has been reported
that Davis had an ID theft issue after running the company's
ads.
In the litigation, Experian claimed that LifeLock placed phony
90-day fraud alerts on hundreds of thousands of the credit files
they maintain. The claim also states that Experian has suffered
"millions of dollars" in damages from being forced to process large
numbers of initial fraud alerts and mail mandatory notices, as
LifeLock keeps its clients files in a perpetual state of alert by
repeatedly "crying wolf" on behalf of its clients. The suit
questions whether LifeLock has the legal right to request the
90-day alerts on behalf of its client, as fraud alerts are meant to
be placed only by individuals who have a reasonable suspicion that
fraudulent activity has occurred or is about to occur. Other
companies, such as Debix Inc.
and TrustedID, offer a
service very similar to the LifeLock model.
Further, Experian also charges that LifeLock has used false and
misleading advertising to entice consumers into buying its
protection, and is exploiting the system by acting as a middleman
for services that the credit companies are required to provide to
consumers for free, including annual credit reports, removal from
mailing lists and fraud alerts. The ironic part of this claim is
that Experian's ConsumerInfo.com has been
the subject of similar claims of misleading advertising from the Federal Trade Commission
(FTC). Experian has settled two consent orders for more than $1
million in fines, while admitting no wrongdoing in their
direct-to-consumer program.
Mortgage Brokers have a great opportunity (while Experian and
LifeLock slug it out in federal court) to become agents in reducing
the toll that ID theft can take on a victim by offering consumers
applications for an ID theft recovery program. This program, called
ID SafeChoice, costs as little as $2 per person. It completely
eliminates the problems and headaches associated with trying to
restore the consumers name and credit history after they have been
victimized by ID theft.
This nominal fee, added to each credit report you purchase,
covers each of those consumers for a period of one year after the
loan application date, which is recorded and triggered with the
purchase of the credit report. When you add the ID SafeChoice
service, available through most credit reporting companies that are
participating members of the National Credit Reporting Association
Inc., a certificate will print with the credit report as a
receipt for enrollment in the program. Participating credit
reporting companies can be found at www.ncrainc.net, which is also
the Web site that consumers use to register and process claims on
ID SafeChoice.
When a consumer with this program becomes a victim of ID theft,
the ID SafeChoice service takes over for a consumer, through a
limited power of attorney, with its team of credit experts from the
credit reporting company. They act on the consumer's behalf to
restore the victim's credit history to pre-theft status. ID
SafeChoice also covers an individual who is already a victim of ID
theft and discovers it at the time of their mortgage application.
There are no other fees for this service—the extra $2 per
person on the credit report covers this program for one year,
regardless of the number of accounts that must be notified and
removed from the consumer's credit history due to the ID theft.
Just think of the marketing opportunities this provides you as a
Mortgage Broker to help bring new applications in the door. You can
offer a consumer peace of mind and protection from the troubles
associated with ID theft for a whole year just by completing an
application. In addition to the applications, you will promote
goodwill by helping someone solve the problems associated with
restoring their identity, which is estimated by the FTC to take
more than two hundred hours of time on their own. Solving that
problem should certainly go a long way in securing a consumer's
mortgage business for life. Some mortgage companies and lenders
offer services like this for more than three times this price, per
month.
Now just be careful how you advertise it!
Terry W. Clemans is the executive director of the National Credit Reporting Association
Inc. (NCRA). He may be reached at (630) 539-1525 or e-mail
[email protected].
