I've Been Mugged

Asurion Expands Service Offering With Malware Protection For Smart Phones

Asurion, a provider of mobile device insurance services, announced yesterday that it will provide Walmart MobileCarePlus customers with free Asurion Mobile Security software. The Asurion security software is available in the respective app stores for Android and Blackberry smart phone users. According to the announcement:

"The Asurion Mobile Security solution regularly scans messages, pictures, installed applications and files on a customer's phone to identify and eliminate the latest viruses and malware, many of which can access private information and harm the mobile device itself. Safe browsing alerts users before visiting web sites which may compromise their phone's security and in the event a protected phone is misplaced, locate features can trigger an audible alarm, making recovery much easier... During the last two years, 48 percent of high school and college age students required a replacement device due to loss or damage."

For lost or stolen smart phones, the security service also includes a remote wipe feature to prevent thieves from accessing sensitive data and contacts on your smart phone.

This blog has warned mobile device users to add anti-malware software to their devices. Security software is available from a variety of vendors. If you are considering insurance for your mobile device, then read this first to help decide what's best for you.

Data Breach At Nationwide Insurance Affects More Than 28,000 Consumers In Georgia

On Monday, the State of Georgia Insurance Commissioner (GADOI) confirmed a data breach at Nationwide Insurance. Hackers gained unauthorized access to private and sensitive information at the company's online computers.

The announcement contained few details. It did not list the specific personal data elements stolen or exposed, nor explain how the breach happened and what the insurance company is doing so this breach won't happen again.

About 28,467 Georgia residents and policyholders were affected. The insurance company has agreed to:

• Provide the GADOI with copies of written breach notices sent to affected consumers,
• Set up a toll-free phone number (800-760-1125) for breach victims to ask questions, and
• Provide breach victims with at least one year of free credit monitoring services

Some news sources reported that the F.B.I. is investigating the breach. Another news source reported that names, birth dates, drivers license numbers, and marital statuses were stolen. Given the personal data elements stolen, the hackers can do damage.

This is not the first data breach at Nationwide. A check of the breach database at Privacy Rights Clearinghouse found that the insurance company had two small breaches (Florida and New York) during 2007 where laptops containing sensitive personal information were stolen from employee's cars. In 2006, Nationwide was one of severalinsurers affected by a lockbox theft at Concentra Preferred Systems in Ohio.

The insurance company has not disclosed the number of affected consumers in other states. More details will emerge and the number of breach victims will most likely increase since several states require notice of data breaches.

You've Been 'Mugged' In An Auto Accident Insurance Scam. What To Do Next?

Recently, an I've Been Mugged reader wrote asking what to do. She had been the innocent victim in an auto insurance scam:

"Two days ago, I was surprised to find myself in a situation that I believe is a clever scam. It involves auto insurance and a trumped up claim. Although the situation is still unfolding, and my carrier may not pay once they investigate, I am shaken at being on the business end of such a scheme. I'm afraid to drive. I feel unsafe because this person has my address and who knows what else such a person might do."

While I had heard about these scams, I have never been involved in an auto accident insurance scam. And, I had not thought about an insurance claim scam as also being a potential identity theft risk, too. It stands to reason that if some criminals are willing to stage a bogus accident, intentionally cause a collision, and/or submit bogus medical claims after an accident, then they are also willing to abuse the other driver's personal data.

So, what should a consumer do to protect yourself? What can a consumer do to protect yourself after a staged accident?

First, I did some online research to learn about the types of auto insurance scams. My thinking is that by understanding them, it would be easier to recognize them and not get tricked. The Allstate Insurance page lists the types of auto insurance scams and fraud schemes:

• Swoop & Squat
• Sideswipe
• Shady Helpers

I am not going to repeat the scam descriptions here. You can visit the site and read them for yourself. Some are intentional collisions. Sadly, criminals will stage bogus accidents or cause intentional collisions. In 2010, Florida led the nation in the number of complaints about insurance fraud related to staged accidents.

Second, I found that auto insurance company websites often provide advice for their policyholders about how to protect yourself, and what to do if you suspect fraud. The State Farm site lists the types of auto insurance frauds and provides instructions for its policyholders:

"To report suspected insurance fraud, call State Farm or the National Insurance Crime Bureau (NICB) hotline: 1-800-TEL-NICB / 1-800-835-6422"

So, if you suspect fraud, you should inform both your auto insurance company and the NICB. I visited the NICB website to learn more.

The NICB, based in Des Plaines, Illinois, is a non-profit organization dedicated to preventing, detecting, and defeating insurance fraud and vehicle theft. The NICB works with more than 1,100 property and casualty insurance companies. The NICB offers an Apple iPhone app for consumers to report suspected insurance fraud.

According to the NICB, staged accidents occur in every state in the nation. In 2010, the top five cities with the most staged accidents and related auto insurance fraud schemes were:

1. New York, New York
2. Tampa, Florida
3. Miami, Florida
4. Orlando, Florida
5. Houston, Texas

And, the top five states were:

1. Florida
2. New York
3. California
4. Texas
5. Illinois

The NICB also describes the types auto insurance scams:

• Swoop & Squat
• Sideswipe
• Panic Stop
• Drive Down

While at the site, I downloaded the NICB Staged Automobile Accident Fraud brochure (Adobe PDF) to learn more. It sounded to me like the I've Been Mugged reader had experienced a "Drive Down" scam.

The NICB also offers a really good flyer for consumers about what to do after an auto accident. Download the Accident Checklist (Adobe PDF). The NICB advises consumers to:

• Tend to the injured. Call emergency and/or ambulance personnel if needed
• Keep a disposable camera in your auto. Take photos of the entire accident scene, and damage to your car, the other car(s), and any buildings affected. Take photos of all cars' license plates and Vehicle Identification Numbers.
• Notify the police immediately, and call them to the scene
• Get the information (e.g., name, address, phone, insurance certificates) of all other drivers involved, and of any witnesses. Either write down the informaton, or take photos of any documents, especially if the driver is not the registered owner of the other car
• Notify your insurance company immediately
• Don't disclose your Social Security Number or bank account information

If you suspect that others involved in the (staged) accident have abused your personal information or committed identity fraud, file a report with local police and get a copy of that police report. I have used the Identity Theft Resource Center (ITRC) website before, and highly recommend it. The site provides plenty of information and advice for a variety of identity theft and fraud situations. If you suspect other drivers in the (staged) accident are abusing your personal information, then Fact Sheet 110 seems to apply. It makes sens to file fraud complaints with your insurance company and with the U.S. Federal Trade Commission (FTC).

If you are feeling particularly vulnerable, you might arrange a consultation with an attorney to get advice about what to do next. Get an attorney referral from somebody you trust and know. I also visited the websites for several states' Attorney General offices, as these websites often contain advice and resources for consumers.  For example, the New York State Attorney General website provides advice for consumers about how to fight auto insurance fraud.

I am sure that some I've Been Mugged readers have opinions or experience with auto insurance claim scams. If you were a victim in a staged auto accident auto insurance scam, what did you do to protect yourself? What resources did you find most helpful?

Houston Identity Theft Theft Ring Arrested After Ordering Smart Phones

The Houston Examiner reported the arrest of members of an identity theft ring that used the stolen identities of Sprint customers to order fraudulent replacement smart phones, which they resold:

"Customers are routinely asked for their secret PIN numbers when they walk into Sprint stores, and federal agents say employees of the store were giving that information to thieves who were using it to get replacement phones that could be sold online."

What I found interesting about this case were the three points where data security failed. Better security at any one of these points could have stopped this theft ring before it started.

First, insider identity theft by employee facilitated the thefts. Using the stolen identities, the thieves ordered replacement smart phones from the insurance company, Asurion, used by Sprint mobile customers. A data breach like this highlights the need for a mobile service provider to implement a Red Flags program to identify and address problem data-security areas.

Second, the insurance company didn't seem to notice the rise in replacement phones within a specific geographic area:

"After filing the insurance claims, Secret Service agents say brand new phones were mailed out to hotels throughout the Houston area."

Most banks regularly flag purchases outside a consumer's normal credit card purchase patterns. Mobile service providers and mobile device insurers could and should do the same; especially where insurance claims include a different delivery address than the customers' home address. The new overage alert features by mobile service providers is a good first step in this direction, but it shouldn't require prodding by the FCC.

Third, several Houston area hotels seem to routinely accept and deliver packages to people who routinely made reservations but never checked in. This is like airlines accepting luggage for passengers who make reservations but never buy a ticket. Airlines have identified this security risk, and so too should hotels. Accept packages if you want, but deliver them only to customers have they have registered and checked in; or make it a perk only for loyalty program members.

The Frenzied World Of Companies Collecting Consumers' Financial Histories

Many consumers believe that if you pay your bills on time, keep your (Experian, Equifax, and TransUnion) credit reports accurate, and keep your credit scores high, then all is well. Not necessarily. There are many more companies that track and collect data about consumers financial history.

Chances are, you haven't heard of their names. The Washington Post reported:

"But little attention has been paid to the firms that target consumers outside the mainstream financial system. Often they are students, immigrants or low-income consumers who do not qualify for traditional loans or choose not to use them... they carry particular weight for the estimated 30 million people who live on the margins of the banking system."

Who are some of the smaller firms? Some of them this blog has covered: ChoicePoint, Innovis, RapLeaf, Quantcast, First Data, Acxiom, Intelius, US Search, and Spokeo. Some are data brokers. Some collect website visitation statistics. Others focus on finance or insurance. Some are technology vendors working with ISPs. A prior blog post discussed the variety of brands of credit scores. Some other firms' names you may not have heard about:

"LexisNexis, whose parent company bought ChoicePoint three years ago, handles background checks, tax assessments and criminal histories. Bounced checks can be tracked through Chex Systems, TeleCheck or SCAN. Payday lenders report to a company called Teletrack. Alliant Data compiles information on so-called “installment payments,” industry jargon for recurring monthly fees such as gym memberships. The National Communications, Telecom and Utilities Exchange collects account information for 63 of that industry’s largest firms..."

The accuracy of the information collected by these firms is suspect:

"Arkansas resident Catherine Taylor didn’t learn about the fourth bureau until she was denied a job at her local Red Cross several years ago. Her rejection letter came with a copy of her file at a firm called ChoicePoint that detailed criminal charges for the intent to sell and manufacture methamphetamines. The information was incorrect... Taylor said she has identified at least 10 companies selling reports with the inaccurate personal and financial information, wrecking her credit history so badly that she says she cannot qualify to purchase a dishwasher at Lowe’s. Taylor must apply for loans under her husband’s name and has retained an attorney to force the firms to correct the record..."

And all of these firms do not include social networking websites, advertising networks, and mobile device marketers -- all collect information and profiles about consumers.

Given the long list of companies across several industries collecting consumers' personal information, you could call this a feeding frenzy.

Would You Buy Pay-As-You-Drive Auto Insurance?

A few nights ago, the CBS affiliate here in Boston broadcast a news story about "pay-as-you-drive auto insurance." The idea is that if you pay auto insurance premiums based on the number of miles you drive. If you drive a lot, you pay more. If you drive less, you pay less. Good drives might pay 2 cents a mile; bad drivers 10 cents a mile.

Why am I writing about this? Be patient and read to the end. The reason will quickly become obvious.

The idea of pay-as-you-drive or pay-per-mile auto insurance appeals to me, mostly because I don't drive much. I am happy to walk and/or take mass transit. Boston has a pretty good mass transit system with buses and subway trains.

My wife and I own one car which we share. When we need a second car, I use Zipcar.com, which is effectively paying for the use of a car (and its auto insurance) only when I need it -- on an hourly basis. If I use a Zipcar more, I pay more. I pay for only for what I use.

It seems a little unfair for me to pay the same amount as a person who drives 1,500 miles each month, while I drive only about 350 miles monthly. So, my auto insurance premiums would decrease substantially with pay-as-you-drive pricing. Another benefit of mileage-based auto insurance:

"A new study commissioned by the Conservation Law Foundation found that basing premiums on mileage would encourage drivers to drive less, cut down on pollution from tailpipe emissions, even reduce accidents which could be attractive for insurers."

The idea of pay-per-mile auto insurance also appeals because this form of pricing is not new. Rental car rates are often mileage based. Airplane and bus travel are often mileage based. you pay more the further you travel.

The news story was rolling along nicely until the reporter mentioned how insurance companies might measure drivers' mileage:

"... drivers would probably have to agree to a tracking device in their car to monitor their mileage and  check their driving habits."

Whoa!! More tracking of consumers?

There is tracking and then there is tracking. Simple tracking might upload once a month the car's odometer mileage reading. That is simple enough, since most new cars have digital odometers. Or, the folks at On-Star might include this with their existing service. It's what I had in mind during this news broadcast.

More invasive tracking might use a GPS device to measure your mileage and speed; in theory to determine whether or not drivers comply with posted speed limits. That is problematic and unnecessary.

Why? First, insurance companies already obtain speeding ticket information from state motor vehicle registries. Second, inspection stations already record mileage during the auto inspection. Just add the upload feature to the RMV.

Third, slow drivers could get penalized needlessly if the tracking doesn't include traffic information. Fourth, extensive tracking collects more information a company could lose or have stolen during a data breach.

Fifth and perhaps most importantly, GPS tracking captures a lot more information than insurance companies need: your location, time of day, travel patterns, and how long you stay at certain places. That is far more extensive data collection than any insurance company deserves, or should have.

Are insurance companies prepared to invest more in data security to protect this information? So far, they don't seem prepared to do so. They would have to because where you are during the day, and your travel patterns over weeks or months, is very valuable information. Burgulars, for one, would love to have it. They'd know when you aren't home and when you are expected to return.

The news reporter, Beth Germano, didn't discuss any of the privacy issues related to tracking. Hopefully she will in a future news telecast, because a rental car company, using GPS tracking, issued a consumer a speeding ticket and included the speeding fine with his auto rental bill. Insurance companies should not perform law enforcement tasks. The insurance company was forced to stop billing speeders.

What's your opinion about pay-as-you-go auto insurance? Would you buy it? What track would you be comfortable with? If you missed the news telecast, here it is:

How To Make Sure Your Bank Accounts Are Covered By FDIC Insurance

You work hard for your money. Naturally, you want to make sure your money is protected. The Federal Deposit Insurance Corporation (FDIC) insures the deposits at member banks. The current FDIC insurance limits:

"If you (or your family) have deposits at one FDIC-insured bank with a combined total balance less than the basic maximum insurance amount under federal law – currently $250,000 through year-end 2013 – all of that money is fully protected. And, as always, you may qualify for much more than the standard maximum insurance amount at the same bank – perhaps millions of dollars of coverage – if you have funds in different "ownership" categories. That's because the FDIC's rules allow for separate $250,000 coverage for deposits held in your name alone (single accounts), accounts with one or more other people (joint accounts), accounts that name beneficiaries when you die (testamentary or revocable trust accounts), and certain retirement accounts, such as Individual Retirement Accounts (IRAs)."

All of this sounds great. How can a consumer easily find out which accounts are insured? Try EDIE, an online estimation tool by the FDIC.

To use EDIE, first you enter (or select) your bank. EDIE has a nice look-up mechanism to find your bank by name and by branch location. Then, select the type of account (e.g., checking, savings, IRA, etc.) you have at that bank, and the amount in that account. You then repeat this last step for each account you have at the same bank.

After entering this data, EDIE will tell you if each account at that bank is covered by FDIC insurance, the amount insured by the FDIC, and if any amounts are not insured (e.g., over the FDIC insurance limit). This presentation by EDIE makes it easy to see how much money you must move to another bank so that it is insured by the FDIC.

I hope that you will use EDIE. I did. It's easy to use.

The 2009 Data Breach Hall Of Shame

This month, Network World magazine released its list of the 2009 Data Breach Hall of Shame. This list includes companies and government agencies that really effed up... they didn't protect consumers' sensitive personal information as they should have. All of these breaches were preventable. Here's who made the list:

1. Transportation Security Administration (TSA) after it accidentally posted on a public Web site a manual that contained complete details on its airport screening procedures,
2. Heartland Payment Systems after it allowed hackers to steal about 130 million credit and debit cards over several months while the company was being certified as PCI compliant for security,
3. Health Net after it lost a hard drive with unencrypted personal, financial, and medical information of 1.5 million consumers and after it waited for six months before notifying government authorities and its breach victims,
4. U.S. Government Printing Office after it posted on a publicly accessible web site a document with details on U.S. civilian nuclear sites marked as "Highly Confidential Safeguards Sensitive,"
5. RockYou Inc after a hacker stole over 32 million consumers' passwords and sign-in credentials that were stored in plain text without any encryption or protection

I agree with Network World. The companies and agencies on this list deserved to be on this list. Their executives were sound asleep when they should have been awake and actively protecting the sensitive information they were entrusted with. In honor of these executives, I'd like to present them with the Data Breach Analysis Flow below, which was first published in this blog in September 2007:

Health Net May Have Violated Consumer Notification Laws After Its Data Breach

From the Boston Examiner:

"On Friday Attorney General Terry Goddard called on Health Net, a Connecticut-based insurance company, to immediately notify its Arizona policyholders whose personal, medical and financial information was either lost or stolen in a data breach that occurred six months ago. He said further that his Office will open an investigation to determine whether a state law requiring prompt notification was violated. Health Net notified the Arizona Department of Insurance on Wednesday that a hard drive containing personal data on some 316,000 present and former Arizona policyholders has been missing since May from the company's headquarters in Shelton, Conn. The company has yet to contact the affected policyholders about the breach, however, saying it plans to send letters to them soon."

Soon? The company already waited six months after the breach to notify State of Connecticut officials. To learn more, read this prior blog post.

How To Check Your Insurance Company's Complaint Record

Everyone has horror stories about insurance companies, whether its auto insurance, health insurance, homeowners, or property insurance. There's a good article at Kiplinger.com that has documented the leading ways insurance companies "mug" or abuse their customers:

"... the top complaint had to do with claims payments -- claims-handling delays (19.1%), followed by denial of claims (17.9%) and unsatisfactory settlement offers (15.0%). You should be concerned if a company you're considering has a lot of complaints in these areas. The next category of complaints revolves around underwriting -- the insurer's process of accepting or rejecting applicants and setting rates. Premium and rating accounted for 4.8% of the complaints, and policy cancellation for 4.2%. The type of insurance policyholders had the most complaints about was accident and health insurance (37.7%), followed closely by auto insurance (33.7%). There were fewer complaints about homeowners insurance (12.71%) and life insurance and annuities (10.4%)."

Maybe you are looking for a new insurance company, or just curious about your current provider. To check an insurance company's complaint record, visit the Consumer Information Source Web site produced by the National Association of Insurance Commissioners (NAIC). Then:

"Type in the name of the company, the state where you live and the type of insurance. (Under "statement type" and "business type," click on "property/casualty" for home and auto insurance or "life, accident and health.") The site then provides the insurer's national complaint statistics. Focus on the complaint ratio, which shows the ratio of the company's U.S. market share of complaints to the company's U.S. market share of premiums for a specific policy type... If the national median complaint ratio is 1.00 and the ratio for the company you're considering is 2.00, for example, that should be a red flag. Also look at the complaint trend report to see whether the company's complaints have been increasing or decreasing over time. If the insurer's complaint ratio is high, check its record at your state insurance department and find out whether any enforcement actions have been taken against the insurer."

To find your state government's insurance department, browse this NAIC Web page with a map of insurance commissioners by state. Both links are great resources, whether you are happy with your current insurance company or looking for a new one.

ChoicePoint Settles With The FTC About Its Data Breaches and Security Lapses

I'd written previously about my less than consumer friendly experiences with ChoiceTrust, a service from ChoicePoint, Inc.. Recently, the U.S. Federal Trace Commission (FTC) announced a settlement by ChoicePoint, Inc. after the company's past data breaches and data security lapses:

"In April 2008, ChoicePoint (now a subsidiary of Reed Elsevier, Inc.) turned off a key electronic security tool used to monitor access to one of its databases, and for four months failed to detect that the security tool was off, according to the FTC. During that period, an unknown person conducted unauthorized searches of a ChoicePoint database containing sensitive consumer information, including Social Security numbers. The searches continued for 30 days. After discovering the breach, the company brought the matter to the FTC’s attention. The FTC alleged that if the security software tool had been working, ChoicePoint likely would have detected the intrusions much earlier and minimized the extent of the breach. The FTC also alleged that ChoicePoint’s conduct violated a 2006 court order mandating that the company institute a comprehensive information security program reasonably designed to protect consumers’ sensitive personal information."

Gee, that's extremely poor management. First, the company fails to implement every security feature it had already established. Second, its actions violated a previous court order about data security. How arrogant can a company act?

ChoicePoint's settlement included actions to:

"... strengthened data security requirements to settle Federal Trade Commission charges that the company failed to implement a comprehensive information security program protecting consumers’ sensitive information... This failure left the door open to a data breach in 2008 that compromised the personal information of 13,750 people and put them at risk of identify theft. ChoicePoint has now agreed to a modified court order that expands its data security assessment and reporting duties and requires the company to pay $275,000."

Was this fine sufficiently large enough? In my opinion, no.

Will ChoicePoint do the right thing and maintain adequate protections for the consumer data it stores and sells? Will it comply with applicable Red Flag rules by the FTC in 2010? Time will tell. I'm not holding my breath.

I'd love to be able to pull my C.L.U.E. insurance reports and records from Choicetrust, but we consumers don't have that option. Due to ChoicePoint's cozy relationship with the government, the company enjoys a near-oligopoly status regarding C.L.U.E. insurance reports. This is a good example of a "free market" sham. Same for the credit-reporting agencies.

At some point, this crap has to end.

How To Confirm That Your Bank Is FDIC Insured

Great advice for consumers from The Consumerist blog. First, some background:

"... FDIC insurance covers banks and NCUA insurance covers credit unions. Not all credit unions are insured by the NCUA, the ones that aren't often have insurance from American Share Insurance (ASI)..."

Here's the important information:

"The best and only way you can confirm that a bank is FDIC insured is by using the FDIC's Bank Find tool. The search will tell you whether or not the bank is in the database but it's not very robust because it does a broad match search. If you search for ING, as in ING Direct, you'll get every bank with 'ing' in its name which is is pretty much every single bank with the word "Savings" in it. An alternative is if you go to the site and find the FDIC certificate number. On the FDIC Bank Find page, click on "More Search Options" and you can enter the certificate number."

For consumers who use credit unions:

"The NCUA has a similar Find a Credit Union search that lets you find the credit union you're interested in. Again, the search is broad match so it might be easier to get the Charter Number of the credit union and entering it directly... Finally there's ASI and you can search for credit unions insured by ASI at their credit union search. FDIC and NCUA are effectively backed by the full faith and credit of the United States, ASI is not."

FTC Continues Toward Credit-Based Auto And Homeowner Insurance Rates

Just before the Christmas holiday, the FTC released this news release:

"The Federal Trade Commission has ordered nine insurance companies to produce information for a study on the use and effect of credit-based insurance scores on consumers of homeowners insurance... The orders require information from the nine largest private providers of homeowners insurance, which have roughly 60 percent of the homeowners insurance market in the U.S..."

The nine insurance companies required to turn over data to the FTC:

1. State Farm Mutual Automobile Insurance Company,
2. The Allstate Corporation,
3. Fire Insurance Exchange,
4. Nationwide Mutual Insurance Company,
5. The Travelers Companies, Inc.,
6. United Services Automobile Association,
7. Liberty Mutual Holding Company, Inc.,
8. The Chubb Corporation, and
9. American Family Mutual Insurance Company.

The companies have until April 24, 2009 to respond to the FTC's data request, which will be used for the FTC's final rules and guidelines.

In June 2008, I wrote about the the FTC's intent to study of the use and effect of credit-based insurance scores on the availability and affordability of automobile and homeowners insurance, and the open comment period for consumers to voice their concerns and objections. I wrote about this because it has everything to do with how companies make money from your sensitive personal data; and how that sensitive personal data is used, archived, and shared between government and industry. According to the latest FTC press release:

"In May 2008, the Commission authorized the use of compulsory process in the homeowners insurance study (http://www.ftc.gov/opa/2008/05/comprofyi.shtm) and posted for public comment a draft model order to obtain data for the study. Based upon comments received, the FTC developed final orders that maximize its research capability while minimizing any unnecessary burden on insurers participating in the study."

Should you be concerned? If this project continues, your auto and homeowners insurance will be based mostly on your credit worthiness rather than on your driving and accident record. Does this make sense? It's another example of the "tilt in the playing field" towards the needs of companies and away from the needs of consumers.

Credit-based insurance rates also mean that consumers must spend more time and money inspecting their credit reports at the three major credit bureaus, because inaccurate credit report information could lead to higher insurance rates. Seems to me like your auto insurance should be based on our driving record; and your homeowner's insurance based on your claim history.

Would You Trade Privacy For Auto Insurance Discounts?

Last week, I mailed to my insurance agent a form for the low-mileage discount. My wife and i drive less than 5,000 miles monthly yearly since I use mass-transit to commute to work. The form required me to disclose the car's odometer and to provide an explanation why we expect to drive less than previously.

I was comfortable with the form my insurance agent required. Then, I saw the MSNBC video below. The new proposed methods by insurance companies would required consumers to disclose far more than your mileage. a GPS device can track (and send to the recipient) your mileage plus everywhere you drive to. A smart recipient could compute your highway speed and issue speeding tickets accordingly. that's a lot of data to provide just for an insurance discount this year, which the insurance company could eliminate next year.

Plus, a data breach at an insurance company would expose far more data to identity thieves and criminals. Data breaches happen at insurance companies:*

• April 2006: Progressive Casualty Insurance
• April 2006: Aetna: 38,000 records exposed
• June 2006: AIG: 930,000 records exposed
• June 2006: Allstate: 2,700 records exposed
• July 2006; Sentry Insurance, 112,270 records exposed
• December 2006: Aetna, Nationwide, and Wellpoint via a vendor: 172,000 records exposed
• October 2007; West Virginia Public Employees Insurance Agency: 200,000 records
• March 2008: Sterling Insurance & Associates: undisclosed
• May 2008: BB&T Insurance: undisclosed
• June 2008: Texas Insurance Claims Service: unknown
• September 2008: State Farm: 137 records exposed

Would you trade privacy for an auto insurance discount? Watch the following:

*Source: Privacy Rights Clearinghouse, Chronology of Data Breaches

Suze Orman And the FDIC Partner To Help Consumers With Determining Bank Account Insurance Status

With the recent bankruptcies of financial firms, some banks, and the general uncertainty with the mortgage and credit crises, consumers are understandably nervous about the status of the bank accounts. This blog has previously discussed tips to help consumers.

Earlier this month, financial expert Suze Orman and the FDIC launched a web site to help consumers determine if their bank accounts are protected by FDIC insurance: www.myfdicinsurance.gov

According to the FDIC web site:

"EDIE the Estimator can calculate your FDIC insurance coverage for each FDIC-insured bank where you have deposit accounts. EDIE lets you know in a printable report for each bank whether your deposits are within or exceed coverage limits."

When using the EIE tool, it was satisfying to read the following privacy information:

"... EDIE the Estimator does not require any confidential or personally identifiable information, nor does it store information after you complete a specific user session. Moreover, users can enter an owner's name by using their real name (Joe Smith), their relationship in the family group (Husband), or numerically (Owner1). The names of beneficiaries (if applicable) can be similarly entered. In addition, as an extra measure of safety, the system is programmed so no account group information for the session is transferred over the Internet."

So, for maximum protection and privacy, enter "Bank #1" for your financial institution and your generic family position (e.g., husband, spouse, child #1, etc.).

Farmers Identity Shield (Product Review)

While watching late-night television recently, I saw an advertisement for Farmers Identity Theft Shield. Readers of this blog know that I'm looking for a replacement credit monitoring service after Discover changed its credit monitoring vendor. The Product and Service Reviews page in this blog lists all of the credit monitoring services I've reviewed so far. Today's post includes a review of Identity Shield from Farmers Insurance.

Farmer's service is coverage a consumer would add to an existing Farmers homeowners insurance policy. It isn't sold separately. The Farmers site does an average job of explaining their offering. The site does not provide a price, so it is difficult for consumers to determine if the Farmers offering is a good value for their money. Some key features of Farmers offering:

• Coverage of $28,500 expenses
• $1,500 indemnity
• Monitoring of credit files and publicly accessible records for fraudulent activity, for two people
• Annual identity report with details of the customer’s credit file and public records
• Professional on call to answer questions regarding identity safety concerns
• Assistance in replacing lost, stolen or damaged identification documents (birth certificate, passport, etc.)
• E-mail tips and news to help prevent identity theft
• Access to Farmers’ informative Web site www.FarmersIdentityShield.com

Actual ID-theft victims would also receive:

• Identity resolution services for the entire household
• 24/7 access to an advocate at Identity 911 to guide the victim through the identity recovery process
• Preparation of correspondence necessary to notify all relevant parties of the fraud (credit bureaus, financial institutions, etc.)
• Creation and maintenance of a case file of all phone calls, documents and results
• Assistance in placing fraud alerts and security freezes with credit bureaus

The focus of the site is to get a consumer to talk with a Farmer insurance agent. While that is a reasonable goal, the site is very weak on providing details. It could and should do both.

The site doesn't explain what the "$1,500 indemnity" means. The insurance coverage is a little more than available from other providers, but the site doesn't provide a link to the full text of the agreement so consumers can read the coverage details. As I discovered in prior product reviews, the important details about insurance coverage and expense reimbursement is covered in the detailed agreement, which the Farmers site doesn't provide.

The Farmers site does not list specifically which credit bureaus it monitors. The copy implies all three national credit bureaus, but I look for precise copy statements, not implications. the site does not explain the training and qualifications its phone-based professionals have, so the user cannot evaluate how beneficial this phone support might be. The site does not even link out to the sub-contractor, Identity 911. This is critical since Identity 911 would provide assistance to ID-theft victims.

I reviewed briefly the www.FarmersIdentityShield.com site and quickly noticed that much or most of its content is a copy of the Identity Theft Knowledge Center site run by Identity 911. I guess that Identity 911 allows its clients to reuse its news, tips, and informational content. While this may greatly help Farmers, it left me wondering how much Farmers Insurance really understands about identity theft. Farmers seemed to have hired a subcontractor to do all of the heavy lifting.

The site says that consumers get an "Annual Identity Report," but the site doesn't show an example report. So, consumers are unable to learn exactly what's in this report and how beneficial it might be (or not). Is it the full text of the consumer's credit reports at all three national credit bureaus? Or is it a Farmers-created summary? And, an annual report may not meet many consumers' identity protection needs. When an alert informs the user that there's a change to one of their credit reports, the consumer wants to see that report immediately... not wait for the annual identity report which could be months away.

Would I buy this product? No way. The site is skimpy on details. Many of the service features and descriptions are vague. No demos or online tutorials. The site does a very poor job of explaining and proving the service benefits and features.

The site didn't offer any explanations of why Farmers Identity Shield might be better than other credit monitoring services. The user is left to make their own comparisons and analysis. It seems that Farmers quickly cobbled together an offering, with the hope that poorly informed consumers would buy it without asking hard questions. Part of the services Farmers seems to charge for (e.g., placing Fraud Alerts and Security Freezes), I have already done and consumers can do for themselves for free. It is very easy and a fast 5-minute phone call for a consumer to place a Fraud Alert on their credit reports.

More importantly, the site fails to state the monthly fee for the service. How can consumers make a decision about a service when the site doesn't state the price?

During the upcoming weeks, I will review more credit monitoring services. You can access prior reviews at the Product and Service Reviews page, or via "Product Reviews" in the right-column tag cloud. To receive alerts about future reviews, click on either of the e-mail or RSS links in the right column.

Equifax "3-in-1" Credit Monitoring Service (Product Review)

After Discover changed its credit monitoring vendor, I started looking for a replacement service. Since the three national credit bureaus all offer credit monitoring services, I thought that I'd look at Equifax's offering. This blog contains posts with reviews of the Experian Triple Alert service and a comparison of several services from Experian.

I performed a simple Google search since I didn't know the name of Equifax's service. The first search result included a link to the Equifax home page, and that's where I went:

First impressions are everything. In the center column, several bullet points summarized the company's credit monitor service features. This was easy and quick to read. Next, the page presented a huge "Get Started' button. The problem: the page lacks links to important service details. To properly evaluate a service, consumers need:

• Examples of their credit report formats from all 3 national credit bureaus
• Examples of the e-mail notices
• Details about the ID-theft insurance
• Expanations of why Equifax's offering is superior to other credit monitoring services

The page didn't present links to any of this information. If the site has it, the presentation forces users to hunt for it.

My first impression: the company produced a consumer unfriendly home page that lacks links to important service details.consumers need to properly evaluate the service. The "Get Started" button links directly to a service registration form page. The home page seems arrogant in its expectation that 4 bullet points are enough for consumers to make an informed purchase decision. No, that's not enough. Either Equifax doesn't understand this, or doesn't care.

This poor presentation is a strong indication to me that Equifax would likely be a difficult brand to interact with, if I registered for their credit monitoring service.

Normally, at this point I would move on to a competitor's web site, but I decided to give Equifax another chance. I clicked on the "View All Products" button which linked to:

This page was a little better. It provides links to the service detail page for each service. The presentation makes it difficult to compare offerings. Does the "3-in-1 Monitoring" service contain everything that the "Credit Watch Gold" service contains? The copy doesn't say so explicitly, so the consumer is left to guess or to read lots of copy. If a consumer doesn't know much about credit monitoring, this page is difficult to use. (I would later discover the site has a service comparison page, but the link to that comparison is buried on the service detail pages and not on this page where it should be.) I selected the "3-in-1 Monitoring" service link.

If I've learned one thing when evaluating credit monitoring services it's this: closely read the page content. There's a lot of explanatory copy on the 3-in-1 Monitoring service detail page. The service detail page lacks links to examples of the various service features. The service contains some basic features (e.g., monitoring of the consumer's credit reports at all 3 national credit bureaus, automated alerts, insurance, 24/7 access to customer service) and some nifty value-added features (e.g., customizable alerts, lock/unlock Security Freeze on your Equifax credit report). The $20,000 of insurance is more than what's available in the Experian Triple Alert service, but the Equifax site doesn't provide any links for users to read details, terms, and conditions about its insurance offering. As a wise person once said, "the devil is in the details."

This is important: the 3-in-1 Monitoring service summary on the All Products Page says, "... unlimited access to your Equifax Credit Report." This is important because only provide the full text of the consumer's Equifax credit report. If there's a problem with the consumer's Experian or TransUnion credit reports, this service provides minimal help. It only alerts you to any changes in those credit reports, and does not provide access to the full text of other branded credit reports.

This means the consumer is left on their own to retrieve their TransUnion and Experian credit reports from those services or another credit monitoring service provider. This could be time consuming; a potential inconvenience if the consumer is trying to determine and fix a credit report with errors, or damage done by an identity thief. Also, additional fees will probably apply to retrieve other branded credit reports.

Consumers need access to the full text of all three credit reports, not just one. Any service that describes itself as comprehensive really isn't comprehensive if it doesn't provide the full text of a consumer's credit reports from all three national credit reports.

Note: the "3-in-1 Monitoring" service page does not mention outsourcing and whether Equifax offshore outsources any of its operations. I know from prior research that all three national credit bureaus announced offshore outsourcing in 2003. (I haven't seen any evidence since to the contrary.) To stay competitive and to manage costs, credit bureaus currently offshore outsource portions of their credit reporting operations, and likely do the same for their credit monitoring services. I would expect a credit bureau like Equifax to mention its offshore outsourcing arrangements so consumers can make a truly informed purchase.

Is $20,000 in insurance enough? You have to decide that for your situation. It's hard to tell because the site doesn't provide a link to the contract or legal terms and conditions. I've Been Mugged readers should read my review of the Experian Triple Alert service to understand the insurance issues.

The bottom line: the Equifax 3-in-1 Monitoring service didn't look like a good deal to me. It claimed to be comprehensive, but isn't. It was a frustrating site to use, and my guess is the actual service isn't any better. Site pages lacked links to important service details and examples. While the service detail pages include a "Take a Tour" link to examples, this content was incomplete and didn't answer most of my concerns. Plus, the "Take a Tour" link was in a tiny font size and easy to miss.

Like the Experian site, the Equifax site was skimpy on explaining important details and benefits. The site didn't show me how its customized alert feature works. The site did a poor job of proving the benefits it claimed. The site didn't contain a copy explaining why it is better service than competitive services. I got the impression that the site pitched weak claims that would be easily believable by uninformed consumers.

Frankly, if the site pitching Equifax 's services to potential customers is this bad, then the actual service for customers probably is worse.

All of this left me with the impression that Equifax is: a) a difficult brand to do business with, and b) not very consumer focused. If I signed up for Equifax's 3-in-1 Monitoring service, it would probably be a frustrating experience. No thanks. I'll continue looking elsewhere for a credit monitoring service.

If you use the Equifax 3-in-1 Monitoring service, please share your experiences. Why did you sign up? What works well? What works poorly? How well do the alerts, credit resolution, and insurance reimbursement services work?

Experian Triple Alert Credit Monitoring Service (Product Review)

After Discover changed its credit monitoring vendor, I started looking for a replacement credit monitoring service. Since the three national credit bureaus all offer credit monitoring services, I thought that I'd start there. First up: Experian.

I'd heard that Experian’s service is called "Triple Alert,", but I wasn't certain. So I did a Google search to find the site. For me, one way to judge a product or service is determine how easy it is to find that service on the Internet. A well organized service (or company) makes it easy for consumers to find them via search engines like Google. The site should appear high up on the first results page and its Web site address (e.g., URL) should include the product or service name. I entered "Experian Triple Alert” in Google.com and received the following results page:

The results page included several Experian links in the left column:

• www.experiandirect.com
• www.experian.com/consumer/login.html
• www.experian.com/consumer/va_data_breach/index.html

None of the links mentioned "triple alert," but several competitors' links mentioned "triple alert." In the right column, one "Experian Triple Alert" link seemed to go to a site (e.g., Moving-Links.com/FreeReport) that wasn't an Experian site. So, I didn't click on that link. The second "Experian Tiple Alert" link in the right column had a question mark next to it, which my anti-virus software indicated was a risky or untested site to visit. So, I definitely wasn't going to click on that link.

The "Experian VA Data Breach" link didn't seem relevant. I was hoping that the results page would include something easily identifiable like "www.triplealert.com" or "www.experian.com/triple alert." My first impression was that Experian wasn't going to make my experience with their brand easy. I clicked on the "www.experiandirect.com" link and see if it would take me where I wanted to go. It brought me to:

The page include a Triple Alert so I felt better; that I’d had arrived at the right site. I thought that the page would present only the Triple Alert service from Experian. Instead, the page was cluttered with several Experian service options. The page presented the Triple Alert service for $4.95 per month, a single credit report plus credit score option for $15, a three credit report plus my credit score option for $24.95, and an online credit report option for $10. Are all of these options Triple Alert services, or only the first option?

The options hyping “online credit report in seconds” and “get your credit report and credit score instantly” seemed silly. Most services on the internet are fast and instant. That's why consumers use the Internet. The copy didn't explain if or why Experian's options are faster than others. Plus, I can see the page thoroughly confusing users who are unfamiliar with credit bureaus and the credit report/score process. The site lacks adviser mechanisms to guide unfamiliar consumers to the appropriate option.

For my needs, I seek a comprehensive credit monitoring service... far more than just a one-time peek at my credit score or my Experian credit report. I need access to the full text of my credit reports from all three national credit bureaus. I also need e-mail or text messaging alerts about the status or changes to my credit reports, credit resolution support and insurance, criminal fraud monitoring, identity fraud assistance when traveling outside the USA, my credit score, credit assistance tools, access to phone support, and easy options to add a Fraud Alert or Security Freeze. The copy on this page did not address all or most of these needs. The closest option seemed to be the Triple Alert option. For my needs, I want both monthly e-mail alerts and customizeable e-mail and text messaging alerts, options many banks and credit card issuers already provide. Why? The sooner you learn about fraudulent charges, the less money you'll lose.

I needed to understand exactly what Triple Alert will and won’t do with its credit resolution services. (Thanks to IBM’s data breach, my personal data has already been exposed.) I selected the “View sample alert” link to learn more about the basic credit reporting features. The sample alert page looked very similar to what I currently receive via my Discover credit monitoring service.

The feature mentioned on the home page: "e-mail alerts to key changes in any of my 3 credit reports” is nice, but the page copy didn't explain how the alerts work: how often, any customization options, and e-mail or text messaging options. Regarding credit monitoring services, I do not look for the cheapest service. I look for the service with the most value and effectiveness. Value is what I get for the monthly fee. Effectiveness includes addressing my needs: protection, alerts/warnings features, customization features, resolution services, adequate insurance and guarantee coverages, support, and reliability.

Next, I clicked on the “10,000 Triple Alert Guarantee” link to learn more about that feature. I expected the guarantee page to explain simply the guarantee and its benefits. Instead, the page presented a word-dense legal agreement in hard-to-read lawyer-speak. I was getting the distinct impression that Experian is a difficult brand to do business with. The guarantee page stated:

“If you (hereinafter "you") become a victim of Identity Theft (as defined below) while enrolled in and using the Triple Alert product, ConsumerInfo.com, Inc. (hereinafter "we", "our" or "us") will reimburse you for certain Identity Theft Expenses (as described in Section 3, below) up to $10,000, subject to the terms and conditions of this Guarantee. "Identity Theft" means that your name, address, Social Security number, bank, or credit card account number, or other personally identifying information was used without your knowledge or approval to commit fraud or other crimes. The maximum amount that we will pay you is $10,000 for Identity Theft Expenses as a direct result of an Identity Theft.”

Why does the copy mention ConsumerInfo.com? I didn't ask for that site. Did I arrive at the wrong site? What is ConsumerInfo.com? Is it a better credit monitoring service? This was confusing and it caused more questions than it answered. Further down the page, it included a description of the types of expenses are covered:

“(a) Stolen Funds: Funds directly stolen from you that are related to any account that is included on your Experian credit report…”
“(b) Legal Expenses: Reasonable and necessary attorney fees or court costs associated with defending any suit brought against you by merchants, financial institutions or other credit grantors or their collection agencies, or the removal of any criminal or civil judgment wrongly entered against you.”
"(c) Lost Wages: Actual United States wages or salary you lose as a direct result of time off work taken by you to report an Identity Theft;”
“(d) Miscellaneous: Loan applications fees, long distance telephone costs, mailing and postage costs, costs of having affidavits or other documents notarized; and”
"(e) Private Investigators: Any fees or costs associated with the use of any investigative agencies or private investigators. You must receive our advanced written consent to your choice of private investigators, and we reserve the right to select such private investigators.”

Note: the Triple Alert site pages do not mention outsourcing and whether Experian offshore outsources any of its operations. I know from prior research that all three national credit bureaus announced offshore outsourcing in 2003. To stay competitive and to manage costs, credit bureaus currently offshore outsource portions of their credit reporting operations, and likely do the same for their credit monitoring services. I would expect a credit bureau like Experian to mention its offshore outsourcing arrangements so consumers can make an informed purchase.

To summarize in plain English: if a bank account is on my Experian credit report and that account has money stolen from it, I would get reimbursed up to $10,000 less reimbursements for other valid expenses. If that bank account wasn't on my Experian credit report, then it isn't covered. That doesn't seem right.

The $10,000 of insurance didn't seem like much. It's pretty easy to have a $5,000 to $7,000 limit on one credit card, and much more in a savings account and mortgage. Attorney fees could easily eat up a large portion of the $10,000 guarantee.

Let’s assume for the moment that the $10,000 guarantee amount is enough coverage. There’s more to consider. The reimbursements are subject to more conditions. To get reimbursed, a consumer must also meet all of the following items:

1. Review your credit reports in a timely manner and report fraudulent items
2. File a police report within 10 days after first learning of identity theft or fraud (or after Experian notification)
3. Contact Experian’s Fraud Resolution Department within 10 days after first learning of identity theft or fraud (or after Experian notification)
4. Place a Fraud Alert with all 3 credit bureaus within 10 days after first learning of identity theft or fraud (or after Experian notification)
5. Work with Experian’s Fraud Resolution Department to pursue any and all sources of reimbursement and submit any receipts and documentation. I must assign Experian rights (Power of Attorney?) to work on my behalf for reimbursements. And I must give back to Experian any reimbursements if I receive funds from another source (e.g., bank, credit card issuers, other insurance, etc.)
6. Honestly inform Experian or pay back any reimbursements to them if they find that I misrepresented something

Obviously, any consumer uncomfortable with these 6 conditions should not sign an agreement with Experian Triple Alert. More importantly, $10,000 guarantee doesn’t provide much coverage. It seems easy to exceed that amount. Think of it this way: when you insure your home, you insure all of it, not part of it. The same applies to credit monitoring insurance or guarantees. If an identity thief steals all of my bank and financial accounts, I want insurance that covers everything. Not part of it. Moreover, residents of New York can't get coverage with Experian Triple Alert.

Note: I checked the Triple Alert Privacy Policy page. Experian Triple Alert participates in behavioral advertising programs:

The National Advertising Initiative (NAI) has developed an opt-out tool with the express purpose of allowing consumers to "opt-out" of the targeted advertising delivered by its member networks. You can visit the NAI opt-out page and opt-out of this cookie tracking. Please visit: www.networkadvertising.org/optout_nonppii.asp for more information."
"Partner sharing Opt-out Options: If a business partner refers you to our Site, you may choose not to have your information shared with that partner by opting-out directly on your order form."

Consumers should be aware of this, since the site (and any Triple Alert partners) monitor customers' Internet use and serve up (supposedly) targeted, relevant ads.

So, the Experian Triple Alert service didn't look like a good deal to me. It looked like a poor value. It wasn't particularly easy to find. It doesn’t meet all or even most of my needs. The web site was skimpy on explaining important details and benefits. When the site provided explanations, it was often difficult to read, hard to find, and confusing. And, the service doesn't offer customizable e-mail/text messaging alerts to warn me as soon as possible of possible fraud. That's a state-of-the-art feature many banks and credit card issuers already provide their customers. Frankly, if the site pitching Experian Triple Alert to potential customers is this bad, then the actual service for customers probably is worse.

The Experian Triple Alert site did not prove to me any of the benefits it claimed, nor that Experian Triple Alert is a quality service worth signing up for. The site didn't convince me that it is better than other credit monitoring services available. The site seemed to pitch weak claims while trying to lure uninformed consumers.

All of this left me with the impression that Experian is a difficult brand to do business with. If I signed up for Experian Triple Alert, it would probably be a frustrating experience. No thanks. I prefer to look elsewhere for a credit monitoring service.

If you use the Experian Triple Alert service, please share your experiences. Why did you sign up? What works well? What works poorly? How well do the alerts, resolution, and reimbursement services help?

FTC Seeks Consumers' Comments On Proposed System To Develop Credit-Based Homeowner Insurance Rates

I often write about the U.S. Federal Trade Commission (FTC), since its activities directly affects us (and our wallets or purses). Prior posts covered the FTC's annual analysis of identity theft and its proposed rules for behavioral advertising, which could affect your Internet usage and privacy. Currently, Congress has required the FTC to study ways to base homeowners insurance rates on credit-based insurance scores.

Yes, you read that correctly. The FTC is studying ways to base your homeowner insurance rates on your financial and credit information. This study was mandated by Section 6(b) of the FTC Act and Section 215 of the Fair and Accurate Credit Transactions Act (FACTA). I've Been Mugged readers know that insurance companies already based property insurance rates on C.L.U.E. reports, that compile consumers' auto and homeowners insurance claim histories.

In 2007, the FTC studied ways to for credit-based auto insurance rates. Some key findings from that July 2007 auto insurance study:

1. Scores effectively predict the number of claims consumers file and the total cost of those claims. Their use is likely to make the price of insurance better match the risk of loss that consumers pose. Thus, on average, as a result of the use of scores, higher-risk consumers pay higher premiums and lower-risk consumers pay lower premiums.

2. Use of scores may result in benefits for consumers. For example, scores permit insurers to evaluate risk with greater accuracy, which may make them more willing to offer insurance to higher-risk consumers for whom they otherwise would not be able to determine an appropriate premium. Scores also may allow insurers to grant and price coverage more efficiently, producing cost savings that could result in lower premiums. Little empirical data was submitted or available to the FTC that would allow the agency to quantify the magnitude of these benefits.

3. Scores are distributed differently among racial and ethnic groups, and these differences are likely to have an effect on the premiums that these groups pay, on average.

4. As a proxy for race and ethnicity in statistical models of insurance, scores have a 1.1 percent and 0.7 percent effect for African-Americans and Hispanics, respectively. This means that most of their predictive power is not as a substitute for membership in racial or ethnic groups. In addition, scores effectively predict risk of claims within racial and ethnic groups.

5. The Commission could not develop an alternative scoring model that would continue to predict risk effectively, yet decrease the differences in scores among racial and ethnic groups.

From the auto insurance study, finding #1 above seems more focused on "risk" rather than "actual claims," which suggests that insurance companies can base auto rates on what they think your risk is, not your actual risk based on claims. Plus, there are a lot of "maybe's" in #2 above. This seems to be a big win for industry and not much of a benefit for consumers.

If this insurance study seems odd to you, it should. One would expect insurance rates to be based on you claim history and not your finances. Companies seem intent on changing this traditional approach. If you are concerned, I strongly encourage you to submit a comment to the FTC. The deadline for submissions is June 18, 2008 -- 2 weeks from today. You can submit comments via postal mail to:
Federal Trade Commission
Office of the Secretary
Room H-135 (Annex C)
600 Pennsylvania Avenue, N.W.
Washington, DC 20580
Be sure to include “Credit-based Insurance Score – Homeowners Insurance – P044804” on both your letter and the envelope.

Lexis-Nexis Parent To Acquire ChoicePoint

BusinessWeek magazine and the Washington Post newspaper both reported the planned acquisition of ChoicePoint by Reed Elsevier, the parent holding company of Lexis-Nexis information services. According to BusinessWeek:

"Talk about a quick fix. Shares of ChoicePoint, which had been languishing near a 52-week low of $31.87, surged on Feb. 21 after the provider of insurance information and ID verification services said it had agreed to be acquired by Anglo-Dutch British information provider Reed Elsevier, owner of Lexis Nexis, for $3.5 billion in cash, or $50 a share..."

BusinessWeek also reported:

"The deal also marks an abrupt end to turnaround plans at the Georgia-based information provider. After experiencing years of rapid growth following its 1997 spin-off from Equifax, ChoicePoint’s stock price settled into a trading range, bouncing back and forth between the low 30s and mid-40s. The problem wasn’t ChoicePoint’s core product, a database of insurance claims which accounts for at over 50% of the company’s $982 million in revenues and 80% of its operating profits. Rather, starting in 2001, management tried to expand beyond ChoicePoint’s core business, funneling the cash from its insurance products into acquisitions, including i2, a software provider to law enforcement agencies. Most, however, have been failures."

Assuming the sales goes through, I hope Reed Elsevier's management can help ChoicePoint improve their customer service. Last year, I purchased my C.L.U.E. insurance reports from ChoicePoint's ChoiceTrust site, to check their accuracy. ChoicePoint never responded to any of my follow-up e-mail inquiries. Nadda. Zilch. That's no way to treat a customer.

If you don't know what a C.L.U.E. report is, and how its content can affect your property insurance rates, see either of these two posts:

• What Does Your C.L.U.E. Insurance Report Say About You?
• Nothing But Silence From Choicepoint

[Editor's note: regarding full disclosure, I worked in marketing management at Lexis-Nexis from 1984 - 1986, and I currently co-manage an e-mail group of former Lexis-Nexis employees.]