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.

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.