by Doug Pollack

Angie’s List is a tremendously popular website that provides “unbiased reports and reviews about service companies”. In this month’s magazine, they publish an article about Lifelock, a very high profile ID theft protection service, that is coming under fire.

The article titled “Identity protection service LifeLock faces scrutiny” describes current litigation that LifeLock is current embroiled in, as well as issues that are being surfaced about the level of identity theft protection offered by the way LifeLock uses the fraud alert mechanism available to consumers from the credit bureaus.  Per this article:

“LifeLock also has come under fire from a number of directions. The company faces an investigation from the New York City Department of Consumer Affairs, a class-action lawsuit and a suit filed by Experian, one of the nation’s three major credit bureaus. Both Experian and the class-action suit allege that LifeLock is engaging in false advertising and deceptive trade practices and that its million-dollar guarantee to members is misleading and filled with loopholes. Furthermore, these critics — along with several credit and identity theft experts — point out that LifeLock charges its members $10 a month for services that consumers can mostly do themselves for free. They also say that LifeLock only protects against new account theft — in other words, when someone uses your credit information to obtain a loan without your knowledge. Javelin Strategy and Research, which tracks financial trends, says this form of identity theft accounted for less than one-third of the 8.1 million identity theft cases in 2007.”

I would think that any organization that is considering embracing LifeLock to address the serious threat posed by identity theft to their customers, members or employees, should make this “must” reading.

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.