As part of the settlement Lifelock, CEO Todd Davis and co founder Robert J. Maynard, Jr. are barred from ever making deceptive claims about its service again and must take measures in better protecting the data of any future customers.

According to the FTC’s complaint, LifeLock has claimed:

• “By now you’ve heard about individuals whose identities have been stolen by identity thieves . . . LifeLock protects against this ever happening to you. Guaranteed.”
• “Please know that we are the first company to prevent identity theft from occurring.”
• “Do you ever worry about identity theft? If so, it’s time you got to know LifeLock. We work to stop identity theft before it happens.”

All of the above statements were found to be false and misleading. All Lifelock did was place a free fraud alert on their customers file. A fraud alert can help prevent new accounts being opened in your name. This accounts for just 17% of all identity theft. A fraud alert cannot protect your existing accounts (the biggest type of identity theft) nor can it prevent medical identity theft or employment identity theft.

As well as their advertising claims, the FTC found Lifelock mislead customers with false information about the safety of their personal data submitted to Lifelock during the sales process.

Customers were told:

• “Only authorized employees of LifeLock will have access to the data that you provide to us, and that access is granted only on a ‘need to know’ basis.”
• “All stored personal data is electronically encrypted.”
• “LifeLock uses highly secure physical, electronic, and managerial procedures to safeguard the confidentiality and security of the data you provide to us.”

Again all statements were found to be false. Your information was freeley available to all staff members and not on a need to know basis.

Absolutely no data was electronically encrypted.

The software they used was known to be highly vulnerable to attack from hackers.

Basically they lied through their teeth to make the sale.

The FTC will be sending out letters to past and present cusomers who fell for the Lifelock scam to see if they qualify for a refund. If you were a victim of Lifelock’s false promises and claims you do not need to do anything, the FTC will contact you with details about how to claim a refund.

You can set up your own fraud alert, monitor your own credit file and remove yourself from mailing lists without spending anything.

We recommend you visit Identity Theft Deterrent and learn how to take proactive steps to protect your own identity instead of leaving it in the hands of a company like Lifelock. Click here for more details.

Experian have been trying to get the practice stopped for some time and it’s hard to blame them when Lifelock charge it’s customers $10 a month and then simply pass on the work to Experian and demand they do the work for free.

Maybe if Lifelock had offered some kind of recompence to Experian they could have smoothed the way a little but that doesn’t seem to be Lifelock’s style.

While their competitors announced they would be dropping the practice of placing fraud alerts and shifting their business models towards credit monitoring, Lifelock CEO Todd Davis announced it would be ‘business as usual’ for them.

By this I imagine he means they will be milking the business for as much as they can for as long as they can and with current profits coming into the Lifelock office at over $10 million a month, his attitude should be no surprise.

Taking on new clients though when they know that they are unlikely to fulfill the service offered is brash at mimimum but again that should be no surprise to anyone following the exploits of Lifelock.

They are already being sued over their advertising claims. Todd davis was made aware that there were some 20 illegal drivers licenses in circulation in his name and obtained using his social security number.

The same social security number he continued to show the public in his attempts to convince them no one could use it because it was being protected by the Lifelock service.

Source: Lifelock Service Ruled Illegal

“We have discovered that LifeLock has been sponsoring advertisements on most major search engines including Google, Yahoo, Lycos, MSN, Dogpile, and AOL, that deceptively led consumers to Lifelock.com. Specifically, when you searched ‘Namesafe.com’ in any major search engine, you found an advertisement that said ‘Namesafe.com’ but when you clicked on it, you were not directed to the official site for NAMESAFE, but rather to our competitor, LifeLock.com” said NAMESAFE founder and CEO David Ridings. “It is one of the most bizarre attempts to steal a company brand and its costumers that I have personally seen. Ironically enough, we consider it a form of ‘corporate identity theft’ from a company that is in the business of protecting identities, and we really could not tolerate it. Having said that, we expect it will stop today.”

The suit was filed June 25, 2008 and seeks statutory damages plus legal costs , as well as injunctive relief for the wrongful use of their Namesafe brand, and the deceptive/misleading advertising practices.

An example is the case of  25-year-old Nathaniel Faulhaber of Parsonsburg, Md., who began paying LifeLock $10 a month for their services back in May 2007 only to later find out that an identity thief had somehow managed to obtain a total of five credit cards in his name — all while he was supposedly under the protection of LifeLock.

“Not only did the primary service not work, but he also found LifeLock’s guarantee to rectify any defect in that service to be useless,” Said one of the lawyers. “LifeLock and the third party entities it employs have provided so little meaningful assistance to Faulhaber that, ironically, he now finds himself in the same situation he would have been in had he never paid LifeLock a dime.”

To add flames to the Lifelock com scam fire, the complaint also says the company appears to have been founded on a deception. For example, Davis and initial LifeLock co-founder Robert Maynard have repeatedly claimed that Maynard came up with the idea for LifeLock while serving 7 days in jail for a crime committed by someone who had stolen Maynard’s identity but an in depth investigation has revealed that Maynard was actually sat in jail after being arrested for not settling a $16K marker he had ran up at a Las Vegas casino.

If you signed up with Lifelock and are unhappy with their service or guarantee or just want further info on the class action you can contact David Paris at Marks & Klein, (732)-747-7100.

As a piece of marketing it was pure genius and has worked better than Todd Davis could have dared to dream when the idea for the ad was first put to him. Based on that ad campaign over 1 million Americans now gladly pay Lifelock $10 a month to protect their own identity the way it protects Todd Davis’s but there’s one small problem………

The Great Lifelock Com Scam

A lawyer who represents several disgruntled Lifelock consumers has been doing a little digging and discovered at least 20 cases of drivers licenses being issued to people using Todd Davis’s social security number as well as some guy in Texas who was able to take out a $500 payday loan in his name thanks to the infamous SSN.

Attorney David Paris who first did the background check on Todd Davis said:

“The company [Lifelock] is lining its coffers with somewhere in the arena of $100 million a year by selling a level of identity theft protection that it simply cannot provide.”

So far 5 lawsuits have been filed in what is becoming known as “The great Lifelock com scam” among security experts and class action status is being sought in all cases.

It’s not just Lifelock customers and class action lawyers who aren’t happy with the Lifelock com advertising either, state agencies in both New York and Montana are investigating the Lifelock advertising campaign.

What About That Famous $1 Million Guarantee?

LifeLock is also being sued in Arizona over its $1 million service guarantee, which the plaintiffs say is misleading because it only covers you if there is a defect in LifeLock’s service.

This means that should a bank or payday loan company not check with a credit bereau or if they do but choose to ignore the fraud alert (this often happens as it slows down the process as was the case with Davis’s bogus payday loan) that Lifelock placed on your file, Lifelock are not responsible because it’s not their fault.

Ignoring the gaping hole in the guarantee for a minute it should be pretty obvious to most that while calling it the great Lifelock scam may be a little harsh, there are some serious problems with their service and the way they are promoting it.

Placing a fraud alert against your name and removing you from mail lists is NOT identity theft protection and by the way, both can be done for free with a phone call. A fraud alert will not protect you if someone is arrested and gives your name and SSN. It won’t help you if someone uses your SSN and good name to apply for a job and then robs their new boss. It won’t help you when someone uses your name to get medical services and it won’t help you if the loan company choose to ignore it!

Of course you may like the idea of having Lifelock take care of placing fraud alerts for you and feel the fee is worth it and that’s ok too. Just be aware when you are checking out their website that paying Lifelock $10 a month does not and cannot guarantee you get full identity theft protection.

UPDATE: The courts have ruled that the fraud alerts placed by Lifelock are illegal and are to be stopped. Lifelock In Trouble Again.

Attorneys want class-action status for lawsuits which say the Lifelock advertising is misleading and even lies about the service Lifelock offers.

Gerald Marks, an attorney in Red Bank, N.J., who is representing the plaintiffs said:

“The advertising is deceptive because it makes you think you are buying an insurance policy, you think that you’re totally protected. That is not the case.”

Not suprisingly, the CEO of Lifelock , Todd Davis (pictured above) claims the lawsuits are unfounded and the company stand by their advertising where he gives out his Social Security number on the grounds that he is protected by Lifelock so his details are of no use to anyone.

Anyone that is apart from the guy who watched the advert and then used that social security number to take out a payday loan in the name of Todd Davis.

The lawsuits are now starting to stack up for Lifelock but as they approach their 1 millionth sign up I’m guessing they can afford the odd court case.

For a fee of around $10 a month for presumably the rest of your life, Lifelock remove the customers name from mail lists and enroll them in the fraud alert system offered free by the 3 credit bureaus. Experian (one of the 3 bureaus) is suing Lifelock because it claims Lifelock is abusing the fraud alert system and wants the practice stopped. This court case is potentially huge for Lifelock as their entire business model is based around the fraud alert.

Lifelock are also being sued by an Arizona customer over their guarantee which its claimed is misleading. The small print says Lifelock will pay for any losses resulting from an identity theft up to the amount of $1 million, it is not a $1 million guarantee.

With some common sense (such as NOT showing your social security number on TV) and a couple of phone calls you can do everything that Lifelock does without the $120 a year price tag and if its their guarantee that’s tempting you, simply take out some insurance, its cheaper!