EXPERIAN SPENDS $ 207.5 MILLION TO ACQUIRE CREDIT MONITORING SERVICES
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The LA Times is reporting Experian, a nationwide consumer reporting agency, will acquire Mighty Net, a small credit bureau. Experian reportedly will pay $207.5 million for Mighty Net, according to an Experian press release. Mighty Net charges consumers approximately $15 a month for consumers to access their credit files and credit scores. The company maintains three websites: CreditReport.com, CreditScore.com and MyCreditScore.com. Experian, which offers some similar credit monitoring services, said it expects to improve the retention rate of Mighty Net customers and to sell them additional products, such as monitoring the Internet for possible use of stolen financial information. Mighty Net, which is privately owned, had 2009 revenue of $115 million and earnings before interest and tax of $28 million, Experian said in its statement. Carter Malloy, an information technology analyst at Stephens Inc., estimated Experian has about 33% of the U.S. consumer credit monitoring and fraud protection market compared to Mighty Net’s 5%. It’s roughly a $2-billion-a-year business overall, with lots of growth potential, he said. Malloy called Mighty Net a “very attractive” target for Experian. One of the most important rights consumers have in America is the right to a free copy of their credit report once in a 12 month time period. This is known as an Annual File Disclosure. In addition to an Annual File Disclosure, consumers have the right to a free credit report due to adverse action (i.e., denied credit) or when a consumer is unemployed and seeking employment. Victims of fraud are also entitled to a free credit report. “Experian’s acquisition of Mighty Net demonstrates Experian’s goal – increase revenue production for the sale of consumer reports. Experian, like Equifax and Trans Union, continue to try to increase revenue from consumer credit report sales despite consumers’ federal right to a free credit report,” says consumer attorney Micah Adkins. “Consumers may also have a right to a free report as a result of a data breach or state law. The consumer reporting agencies are making record profits for services they are required to provide to consumers under federal law.” |