Lifelock Being Sued Over Fraudulent Claims
Fraud-prevention company LifeLock has become well known after CEO and spokesperson Todd Davis posted his actual Social Security number on television screens, billboards and bus stops, but customers of the company in Maryland, New Jersey and West Virginia are suing Davis.
The customers say that Davis pushed the company’s fraud-prevention program, meanwhile knowing that it wasn’t as flawless as he made it appear to be.
According to attorney David Paris, there have been at least 20 attempts by criminals to apply for driver’s licenses with Davis’ Social Security number.
Davis himself said that his ads had resulted in at least 87 attempts to steal his identity, but one succeeded: a Texas man who used Davis’ Social Security number to receive an online payday loan of $500.
Davis said he didn’t find out about the fraud in Texas until the payday-loan company called him to collect the loan.
Davis said it’s possible driver’s licenses have been issued to other people in his name because of the widespread availability of his personal information – and because of what he described as the flimsy mechanisms in place to report that kind of fraud.
Paris said that even this one instance shows that LifeLock’s system is ineffective.
"It’s further evidence of the ineffectiveness of the services that LifeLock advertises," said Paris, who is lead attorney on the three new lawsuits, the latest of which was filed this month.
Paris added that LifeLock charges $10 a month to set fraud alerts with credit bureaus, even though consumers can do it themselves for free.
"There’s nothing on my actual credit report about uncollected funds, no outstanding tickets or warrants or anything," said Davis.
"There’s nothing to indicate my identity has been successfully compromised other than the one instance. I know I’m taking a slightly higher risk. But I’ll take my risk for the tremendous benefit we’re bringing to society and to consumers."
Paris is seeking class-action lawsuits to highlight the fundamental limits on how much security identity-theft companies can provide.
LifeLock boasts of its $1 million service guarantee, which it says it will cover any loss due to stolen identity up to $1 million.
But the company is also being sued in Arizona over this guarantee, which the plaintiffs claim is misleading because it only covers a defect in LifeLock’s service, and in California by the Experian credit bureau. Experian accuses LifeLock of deceiving consumers about the breadth of its protection and abusing the system for attaching fraud alerts to credit reports.
Security experts say complaints about the company simply reinforce the concept of keeping your Social Security number secret.
"There’s been a lot of marketing, a lot of hype about LifeLock," said Paul Stephens, director of policy and advocacy with the Privacy Rights Clearinghouse, a nonprofit consumer advocacy organization. "The question is, ‘How much protection does it really buy you?’"
"There is no company that can guarantee they can protect you (completely) against identity theft," Stephens said. "Absolutely nobody can do that."
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