by Doug Pollack

This past week there have been a flurry of articles about the state of litigation pending against LifeLock. An AP article titled “ID protection ads come back to bite the pitchman” is illuminating relative to how this situation has expanded. The “pitchman” noted in this article is Todd Davis, CEO of LifeLock who proudly displays his real social security number in ads that run on TV, newspapers and elsewhere.

Per the article,

“Now, Lifelock customers in Maryland, New Jersey and West Virginia are suing Davis, claiming his service didn’t work as promised and he knew it wouldn’t, because the service had failed even him. Attorney David Paris said he found records of other people applying for or receiving driver’s licenses at least 20 times using Davis’ Social Security number, though some of the applications may have been rejected because data in them didn’t match what the Social Security Administration had on file.”

As one can discern reading this article, Mr. Davis remains totally unrepentant. He defends their advertising, the nature of the $1MM guarantee that is at issue as part of the “deceptive practices” claim in the lawsuits, and the efficacy of their identity theft protection product even in the face of evidence that brings into doubt its effectiveness.

In an interview yesterday with Matt Lauer on the NBC Today Show, he was asked about whether LifeLock does anything for their customers that they can’t do themselves. While acknowledging that consumers can set fraud alerts and “opt out” of credit card offers pretty easily on their own, he defended what LifeLock does do that consumers can do for themselves, noting that it monitors numerous databases on the internet, for instance in chatrooms, where identity theft can occur. What he didn’t mention is that this capability was only added to the LifeLock offering very recently. Since the class action lawsuits were filed.

So it would appear now that the courts will help assess whether LifeLock has engaged in deceptive advertising practices and made misleading claims about its identity theft service.

by Doug Pollack

This past week, there were two class action lawsuits filed against LifeLock, one in its home state of Arizona and one in New Jersey. Following on a recent lawsuit filed against LifeLock by Experian, one of three US credit bureaus, these class action lawsuits also assert that LifeLock is engaged in deceptive advertising relative to the level of protection provided by their service against identity theft. The LifeLock offering depends almost entirely upon the placement of perpetual fraud alerts as the means for protecting their subscribers from identity theft.

As noted by David Paris, an attorney involved in this matter, in an article on the CNBC website titled “N.J. Class Action Lawsuit Filed Against LifeLock Alleging Deceptive Marketing Regarding Limited Level of Protection Against Identity Theft“:

” ‘While fraud alerts may be effective in limited instances, they certainly cannot provide the comprehensive identity protection that LifeLock deceptively advertises,’ said Paris. ‘For instance, fraud alerts cannot stop the use of existing account numbers, and contrary to LifeLock’s advertisements, lenders are certainly not required to contact the subscriber before extending credit to a potential identity thief.’ ”

The article and comments from Mr. Paris also address the alleged deceptive nature a severe limitations on the highly publicized $1MM LifeLock Guarantee:

“According to the Complaint, LifeLock also misleads subscribers by advertising its $1 million service guarantee. ‘Potential LifeLock subscribers are enticed by the ’safety net’ of what appears to be a one-million dollar insurance policy against any losses sustained as a result of identity theft,’ said Paris. ‘In actuality, once you get beyond the limitations and disclaimers, you find that the guarantee is limited to fixing failures in LifeLock’s services and paying third-parties to attempt to restore subscriber losses.’ ”

Hopefully these lawsuits will help bring visibility and clarity to consumers as to the differences in identity theft protection services. Most services, including those provided by the company that sponsors this blog, ID Experts, do not rely on fraud alerts as a primary or sole means of protection, nor do they make questionable or misleading large dollar guarantees. It is unfortunate that brash marketing tactics have made it difficult for consumers to make an informed product decision based on the facts related to differences in these services.