Lifelock's identity theft protection saga racks up 339 articles in Google!

Todd Davis, Lifelock's flamboyant CEO, who flashes his social security in public to sell identity theft protection made Yahoo's top five stories of the week. When I checked Google News, there were no less than 339 articles covering the woes of Lifelock and it's CEO.

Lifelock has been mired in controversy since it was revealed in the New Phoenix Times that one of his co-founders (Robert Maynard) wasn't being truthful about being an identity theft victim and was suspected of being a identity thief, himself.

I covered this part of the Lifelock saga in a post called, "Is LifeLock an identity theft protection service people can trust?"

Maynard stepped down from his position as co-founder, but continued to maintain a 10 percent interest in the company.

A short while thereafter, it was revealed that Todd Davis was himself a victim of identity theft. Instead of letting the authorities do their job, Davis took it upon himself to send out a PI (and film crew) to get a pre-written confession from the scoundrel. The end result was that the authorities dropped the case.

Meanwhile, Lifelock seemed to flourish and obtained a lot of investment capital to drive their aggressive marketing campaign. Everyone from Radio icons to bloggers have been paid to endorse their services.

The bad publicity even led to speculation that an organized hit job was being undertaken against Lifelock.

So far as the organized hit job theory, it does have some merit. The reason for this is that Lifelock's service isn't much different than what a lot of other companies are offering. Additionally, the repetitive fraud alerts make it more expensive to issue credit, and there is a cost incurred by the credit bureaus for providing them.

Then there is the competitive edge, identity theft protection services are being hawked by a lot of different companies. They range from unknown start-ups to financial institutions and the credit bureaus, themselves. In not very good economic times, the industry is showing double-digit growth.

The Motley Fool gave a good explanation of the reason for this in their article (one of the recent 339 or so) about Lifelock:

There's clearly profit to be had in the privacy protection market -- much-needed profit for credit reporting-related services. The 2003 passage of the Fair and Accurate Credit Transactions Act (FACT Act) handicapped one of their revenue streams by mandating free credit reports for all. (Get yours at annualcreditreport.com.)

To help make up for the financial shortfall, the credit reporting companies created a new revenue stream: credit watch products. Seeing profit in consumer fear, other companies soon created their own credit watch muscle for hire.

Please note, the article in the Motley Fool gives some pretty sound advice about how to protect yourself for free from identity theft, also.

Then came the legal actions, first Experian filed a law suit and then came a series of class actions alleging the Lifelock is guilty of misleading advertising, doesn't warn it's customers that it only provides limited protection and doesn't warn them that repetitive fraud alerts might damage their credit rating.

I suspect the current flurry of stories were partially the result of information released from the law offices in the class action suits that Todd Davis has been the victim of identity theft numerous times.

It's now been revealed that Davis' identity has been compromised 87 times in the past two years. 20 of these attempts involved drivers licenses. Davis has responded by stating that this proves Lifelock protects it's consumers from identity theft since the only known successful attempt was with the PayDay loan in Texas.

While this might be partially true, there is a flaw in this thinking. The flaw is that partial information isn't always picked up by credit bureaus and credit bureaus don't detect all forms of identity theft.

A new buzz word in identity theft circles is "synthetic identity theft." Here is a description of it from a previous post:

This is where different parts of other people's identities are used to forge a synthetic one. Quite often, because a lot of the information doesn't match, the credit bureaus don't pick it up. Most frequently, this is discovered at tax time, when someone gets a bill for taxes that an identity thief never paid to the government.

So far as identity theft that isn't picked up on a credit bureau, here is what I wrote about that in the same post:

Another reason there is no way to guarantee protection is that not all identity theft shows up on credit bureaus. Some examples of this are in cases of medical benefit fraud, employment fraud, government benefit fraud, some forms of check fraud and last, but not least, when it is used to commit crimes of other than a financial nature.

Because of these reasons, I'm not certain if Mr. Davis can be sure that all 87 attempts were entirely unsuccessful?

Another marketing claim that many feel is misleading is Lifelock's $1 million dollar guarantee. If you read the fine print, they only guarantee they will hire people to look into it should you become a statistic while using their service. They also stipulate that they will choose who does this for you.

Trust me, it's highly unlikely anyone will collect much of anything if they become an identity theft statistic while paying for Lifelock. In most instances, after the work is done, the financial institutions end up responsible for the loss.

Of course, when this happens the cost is passed on to all of us. No business would be able to remain solvent, otherwise.

The sad truth is that there really is no guarantee that you will never become an identity theft victim and it's probably better to exercise common sense and perform your own due diligence.

Since I seem to be quoting myself a lot in this post, here is something I wrote about this:

Most of the experts (not selling services) agree most people can fix their identity for free, and in the long run, they might do a better job of it, themselves.

If someone were to do this, a good place would be the FTC's Identity Theft page. Other decent free resources are the Identity Theft Resource Center and the Privacy Rights Clearinghouse.

Last, but not least, the good folks at Attrition.org did a highly amusing parody of identity theft protection services after they got sick and tired of them using their free material:

Going forward, we would like to announce that we have a new partnership with Identity-Love-Sock, a trusted provider of identity theft prevention services. Not only can Identity-Love-Sock protect YOU from IDENTITY THEFT, it also provides several guarantees for your PROTECTION should YOU be affected by IDENTITY THEFT. With the services provided by Identity-Love-Sock , YOU will NEVER have to WORRY about your IDENTITY being STOLEN, MISUSED, or otherwise COMPROMISED. For more details on how YOU can be COVERED and PROTECTED, please visit Identity-Love-Sock . You'll be glad you did.

Along with covering various matters related to computer security and privacy, Attrition is recognized for maintaining a pretty telling database on where a lot of identity theft starts, or data breaches.

Another law suit filed against Lifelock identity theft protection services in West Virginia

Despite all the publicity that Lifelock continues to do well, a third class action has been filed against them for misleading advertising in West Virginia.

From the PR Newswire release:

Marks & Klein, LLP today filed its third class action lawsuit against LifeLock, Inc., a provider of identity theft protection services, and its CEO Richard "Todd" Davis. The lawsuit was filed in the Circuit Court of Jackson County, West Virginia (Docket No. 08-C-69), on behalf of Kevin Gerhold of Falling Rivers, as well as all other LifeLock subscribers in West Virginia.

This follows similar class actions filed in New Jersey and Maryland.

"The lawsuits allege that LifeLock and its multi-million-dollar advertising campaign provided false and misleading information about the limited level of identity protection the company provides, and failed to warn them about the potential adverse impact the company's services could have on their credit profiles," according to the press release.

Additionally, the release alleges that Lifelock CEO, Todd Davis has been a victim of identity theft multiple times since using his SSN as a marketing tool to sell the service.

So far only one instance of this has been reported. Here is what I wrote about it in a previous post about pending litigation between Experian and Lifelock:

Shortly thereafter, CEO Todd Davis made headlines when he organized a "posee," complete with film crew to go after the person, who stole his identity to get a loan. The identity thief in question was described as mentally disabled by the authorities and the charges were dropped because of the questionable tactics used, referred to as coercion.

So far as Lifelock not protecting people from all forms of identity theft, as alleged in all three of these actions, I offered my speculation (opinion) on what that was referring to:

Another reason there is no way to guarantee protection is that not all identity theft shows up on credit bureaus. Some examples of this are in cases of medical benefit fraud, employment fraud, government benefit fraud, some forms of check fraud and last, but not least, when it is used to commit crimes of other than a financial nature.

The press release indicates that other law suits are being considered in other States.

An item of interest not disclosed in all the other actions was that a woman had her stolen debit card used to purchase identity theft services from Lifelock:

Beyond the charges leveled in the Complaints, lead counsel Paris related the story of a Wisconsin consumer who contacted the firm regarding her accidental experience with LifeLock. "Her debit card was stolen and the thief had the audacity to use the card to buy a subscription to LifeLock," he noted. "Most disturbingly, LifeLock issued the subscription to the thief in the thief's name, clearly failing to verify the appropriate information."

I guess the person, who did this believes in protecting their own identity, at least, as long as, they aren't paying for it, themselves?

The services offered by Lifelock aren't much different than a lot of other services being offered by other companies. This has often led me to wonder if the actions against Lifelock are only the beginning?

The identity theft industry, which is growing at a double-digit rate, has attracted a of start up companies and it can be difficult for the consumer to determine exactly what they are paying for.

Most of the experts (not selling services) agree most people can fix their identity for free, and in the long run, they might do a better job of it, themselves.

If someone were to do this, a good place would be the FTC's Identity Theft page. Other decent free resources are the Identity Theft Resource Center and the Privacy Rights Clearinghouse.

Three law suits against Lifelock point to problems in the ID Theft protection business!

With the news that yet another class action law suit was being filed against Lifelock, it made me realize why identity theft and the subsequent loss of privacy seems to be a growing issue. As with most things in the world, money seems to come first and people take a distant second place.

After all the identity theft crisis wasn't caused by Lifelock, despite all controversy surrounding the company. And the service they provide isn't much different than what many other companies provide, either.

If I were some of these other companies, I'd be watching this litigation, closely.

The latest law suit was filed in New Jersey on March 28th and is similar to the other two, already filed.

There is even speculation about an organized hit job on Lifelock by the credit bureaus and perhaps, the people issuing credit.

Of course, the credit bureaus and the credit card companies probably didn't cause the identity theft crisis, either. They might have helped enable it by buying and selling too much information and storing it in some not very safe places, but they didn't cause it.

The true cause of the identity theft crisis is what seems to be an organized GLOBAL criminal effort to steal information. Everyone suing each other has hardly put a dent in the activity, nor is it likely to. In fact, I often wonder if the criminals aren't sitting back and laughing at everyone pointing the finger at each other, while they steal us blind?

The identity theft crisis has been the inspiration for a lot of businesses to provide a product to protect people from identity theft. Interestingly enough, most of the credit card companies and the credit bureaus are offering pay for protection products to their customers, also. This is especially ironic because information to commit identity theft is probably stolen from them all the time.

In fact, there are so many pay for protection services, it's pretty hard for the "average joe" to figure out which one is better than another, or if it's even worth signing up for.

The identity theft protection business is showing double-digit growth in not very healthy economic times. As long as it is a highly profitable venture, it is likely to attract a lot of players wanting to get in on the business of protecting people from it.

In the most recent class action, it alleges that Lifelock doesn't protect it's customers from all forms of identity theft. It also alleges that putting repetitive alerts on a credit report might hurt a person's ability to get credit. Last but not least it alleges that Todd Davis -- the CEO of Lifelock who plasters his own social security number all over the place as a marketing tool -- has himself been an identity theft victim several times.

I knew about Mr. Davis being a victim once, but the fact that he has been victimized several times was a new revelation (?). I guess that means more controversy to come?

The truth is that Lifelock is no different from a lot of services that can't protect it's customers from all forms of identity theft. Perhaps that goes back to the root cause of what enables identity theft, or the storing of too much personal information in not very secure places. Of course, since too many people are making a lot of money from all this information, some of them are resistant to make it more secure (harder to get at).

Making it harder to get at would make the mechanics of issuing credit more difficult. Of course, given the current financial crisis, I've often wondered if more due diligence and regulation might make us all a little better off?

What the law suit is probably referring to when they say there is no guaranteed protection against identity theft is synthetic identity theft. This is where different parts of other people's identities are used to forge a synthetic one. Quite often, because a lot of the information doesn't match, the credit bureaus don't pick it up. Most frequently, this is discovered at tax time, when someone gets a bill for taxes that an identity thief never paid to the government.

Most experts recommend that you watch your yearly Social Security statement carefully because of this.

Synthetic identity theft is corrupting a lot of the data bases out there, also. Anyone, who uses the services of a data broker, knows that there is a lot of incorrect information already showing up in these data bases. Most of the data brokers have prominent disclaimers about this on their main page when you look information up.

In fact, if someone wanted to see if they were a victim of synthetic identity theft some of these data bases would be a good place to start.

Another reason there is no way to guarantee protection is that not all identity theft shows up on credit bureaus. Some examples of this are in cases of medical benefit fraud, employment fraud, government benefit fraud, some forms of check fraud and last, but not least, when it is used to commit crimes of other than a financial nature.

The International criminal element is very creative at figuring out where the loopholes are. In fact, some say they are sharing information and operating on an economy of scale. My guess is that as long as they suffer few consequences for their activitites, a lot of people are going to continue to be victimized.

Meanwhile the good guys are all suing each other, deep sixing how they are having information stolen from them, and arguing about who is responsible for the mess. It's a shame that the good guys don't become more transparent about the problem, realize who the problem really is, and then come together as team to go after it.

So far as paying for identity theft protection, it can be bought, or if one has the knowledge, done for free. I've looked at a lot of the services and there is no doubt that some are a lot better than others.

Believe it, or not, I've even had the pleasure of meeting people within the industry that do really care about the people they are protecting. One shoe rarely fits all when it comes to human beings.

We need to remember that the industry is unregulated and all the current litigation might be an argument for some sort of certification (regulation).

Even without regulation, protecting someone's personal identity is a matter of trust. Everyone in the identity theft protection business needs to reflect on this and remember that in the end, consumer trust is going to be a key component of whether they are successful, or not.

In the end, perhaps it's time for a wake up call. After all a lot of people are suffering because someone took one a very personal item from them, or their very own identity.

Previous posts on this blog about the continuing Lifelock saga can be seen, here.

Will the Experian versus Lifelock law suit help identity theft victims?

Lifelock -- one of the companies that offers identity theft protection at a cost -- is being taken on by one of the big three credit bureaus. Last week, Experian filed a law suit seeking damages for their costs associated with placing and replacing credit alerts.

Before continuing on, it needs to be noted, as it has been by Lifelock CEO Todd Davis that Experian and the other members of the big three are involved in the identity theft protection business, also.

There is an interesting article by Terry Bibo at the PJStar.com about a Catepillar retiree, who was offered free credit monitoring after a data compromise. According to the article, the retiree tried to use the company provided protection service (ConsumerInfo.com), which is owned by Experian. The end result is seven months later all he has received is someone else's credit report and nothing has been done to protect him from becoming a victim.

It should also be noted that Lifelock isn't the only identity theft protection service that operates along the business model of charging people to place credit alerts or freezes on their reports.

Other companies, such as Debix and Trusted ID offer pretty much the same service.

Unfortunately, I'm not certain that any of this is necessarily going give any additional recourse to the millions of identity theft victims, who should be what this is all about. This law suit seems to be more about who is going to cash in on the identity theft protection industry, which by most estimates is showing double digit growth.

Lifelock has been under fire since it was disclosed by Ray Stern at the New Phoenix Times that one of the founders, Robert Maynard had been banned by the FTC to work in the credit repair industry and had been accused of identity theft by his father, who bears the same name he does.

At the time, Lifelock marketed their product by claiming it was inspired by Maynard being wrongfully arrested after his identity was stolen. The article revealed evidence that this wasn't true, and revealed that Maynard had been arrested for not paying his bill at a casino. The story was backed up with a booking photo of Maynard and a statement from an official source at the Clark County DA's office that Maynard had never claimed identity theft at the time of his arrest. In fact, according to the source at the DA, he made full restitution, which prevented the case from being prosecuted.

Shortly thereafter, CEO Todd Davis made headlines when he organized a "posee," complete with film crew to go after the person, who stole his identity to get a loan. The identity thief in question was described as mentally disabled by the authorities and the charges were dropped because of the questionable tactics used, referred to as coercion.

There are a lot of forms of identity theft and not all of them show up on a credit report. The fact that Todd Davis' social security number (which he plasters all over the universe as a marketing tool) is a pretty good indicator of this.

Stephen Lemons, who writes Feathered Bastard column for the New Phoenix Times wrote about the pending law suit. He pointed out that despite the negative publicity that Lifelock has received, it's business continues to grow.

The advertising campaign referred to consists of everything from television advertising to blogs. In fact, some of these blogs could probably be classified as splogs (my opinion). Recently, I've even seen e-mails touting the service that were caught in my spam filter. These e-mails have the following verbiage, "BBB: "LifeLock is the best Identity Theft Protection We Have Found."

When looking into this it was pointed out to me that the BBB (at least the Better Business Bureau?) doesn't provide endorsements.

Another thing, I noted in the several unsolicited e-mails I've received was that I was getting them because I had "opted in" at either Lifelock, or an affiliate. Strange, I don't remember ever opting in to receive e-mail campaigns from Lifelock? I do remember tracing a mysterious link from a Lifelock affiliate to this blog. When you tried to click on this link, which was set up on a Chinese domain, it redirected right to the main Lifelock website.

There are a lot of players in pay per credit alert business. Will this litigation eventually be the precedent for further litigation? I suspect Lifelock is the initial target because of some of the aggressive marketing tactics they use.

In November, the New York Times published an article by Brad Stone about Gideon Yu and his investment in Debix. In the article, he wrote:

Gideon Yu, the former chief financial officer of YouTube and current chief financial officer of Facebook, is one of the most notable new executives in Silicon Valley. But while Mr. Yu operated in high-tech’s highest circles over the last two years, an impersonator was quietly using his name and credit card number to make fraudulent purchases.

This is another testament that just about anyone can become an identity theft victim and it noted the frustration Mr. Yu went through trying to resolve his personal issue.

Another item mentioned in the article was that the credit bureaus make it difficult for the average person to protect themselves:

Other individual investors and venture capital firms also see opportunity in the business of combating identity theft. The big three credit agencies — Equifax, Experian and TransUnion — offer several tools for preventing ID theft, but generally make putting such measures in place difficult for consumers — requiring them to send requests by certified mail, for example, and making them renew fraud alerts every 90 days.

What's interesting about this is that most identity theft has been enabled by the buying and selling of too much personal information without protecting it very well (my opinion). It makes sense that those profiting from selling information and protecting us from the fall out wouldn't want to make identity theft protection easy. If they did, it probably would cut into some profit margins by making it harder to issue credit. Of course with the record amount of bad debt out there, this might not be such as bad idea (my opinion again)?

I'm not sure where this lawsuit will go, or if this action will spawn others in the future. The only thing I do know is that it would be nice to see the victim get a fair shake for once. There has to be a better way for the average consumer to protect themselves.

The article quotes Gail Hillebrand at the Consumers Union:

Many consumer advocates say that no one should have to pay anything to defend against identity theft. “Having to renew a fraud alert every 90 days is a pain, and I can see why there’s demand for these services,” said Gail Hillebrand, a senior lawyer at Consumers Union. “But the ultimate solution is not for consumers to pay someone extra. It’s for the credit agencies to make this an easier process and to extend fraud alerts for a year.”

NY Times article about Gideon Yu and Debix, here.

Feathered Bastard article, which contains a link with the actual Experian complaint, here.

In case you can't afford the extra money to protect yourself, or simply are frugal, here are two links on how to "do it yourself," I recommend taking a look at:

FTC site on how to deal with identity theft, here.

Information by the Privacy Rights Clearinghouse, here.

Consumers Union (quoted above) does a lot of work to advocate for better laws that will be more consumer friendly, also.

Lifelock CEO's identity theft case dropped - authorities cite coercion as the reason

No one can dispute that Lifelock -- the identity theft protection company offering a million dollar guarantee -- is pretty aggressive in their marketing tactics. They pay everyone from bloggers to the likes of Howard Stern, Rush Limbaugh and Fred Thompson to promote their products.

It now appears that marketing isn't the only thing they are aggressive at.

Recently, as a result of a New Times article, their founder Robert Maynard stepped down from his position after it was suggested that his stories of being an identity theft victim weren't exactly one-hundred percent accurate. Even more damaging was an allegation that Maynard used his father's identity to secure a American Express card that went bad.

The identity theft story had been often heralded as one of the reasons behind the Lifelock business concept.

Even though Maynard stepped down, it appears he is still making money from Lifelock and hawking it's products. At the time of this announcement a rumor came out that Todd Davis, Lifelock's CEO -- who plasters his social security number all over the Internet to show his confidence in Lifelock -- was himself a victim of identity theft.

It has now come to light that Mr. Davis wasn't happy with the Texas authorities sense of urgency on his personal matter and took it upon himself to send a film crew and Lifelock representative (private-eye) to his evil twin's house to get him to sign a prewritten confession.

Apparently, the suspect was told to either sign the prewritten confession and agree to community service, or the Police would be out to arrest him. None of the articles, I read indicated, whether or not, the suspect had any part in preparing the prewritten confession.

In defense of the authorities concerned, there is a lot of identity theft to investigate. It turns out they were waiting for additional evidence to tie the suspect into the use of Davis' identity. The evidence they were waiting for was records from ATT to verify the suspect's Internet Protocol address, which they had already subpoenaed.

Although, not specifically stated, this leads me to believe that the theft using Mr. Davis' identity was originated, where a lot of this type of theft starts, or on the Internet.

It also appears that the authorities had advised Davis to let them do their job, and he decided to do otherwise.

The person involved doesn't appear to be a very sophisticated identity thief. He is described by the Fort Worth authorities as "mentally disabled."

All I have to say is that it doesn't help Davis' marketing efforts when a mentally disabled person is able to commit identity theft using the social security number, he put up all over the Internet. Of course, the suspect in this case can't be considered very bright, either. Apparently, he got the social security number right off Lifelock's website, where Davis is basically daring someone to steal it.

I have to wonder if he wanted to get caught?

It doesn't seem reasonable when a film crew and private investigator use "pretty questionable tactics" (my opinion) to resolve the crime. Of course, this isn't only my opinion because the authorities in question have now dropped the case because of the sloppy investigative tactics referred to as "coercion."

To put this in perspective, this suspect, who is described as mentally disabled, stole $500.00 using Davis' identity, which is plastered on the Internet for all to see. According to the original New Age article, Maynard, who was or maybe still is his business partner, allegedly ran up a $170,000 tab using his father's identity.

We don't see Lifelock dispatching private eyes and a film crew to track down Maynard.

There was speculation when the original post came out on Lifelock someone was orchestrating a hit job on them. I don't know, if this is true, but Lifelock seems to leave themselves wide open for attack.

When reading about this post, I came upon a rather amusing summary of the Lifelock saga, written by Robert Cringley at InfoWorld entitled:

Dumb, dumber, and Davis

On a closing note, I am an advocate of pursuing identity thieves to the fullest extent of the law. However, we must always realize that in our zeal to do so, people have rights, which need to be protected, also.

There has been recent evidence of innocent people being charged with crimes because their identity was stolen. This makes it even more important to ensure that the person being charged is actually the guilty party.

Here is a post, I did about the wrong people being charged with a crime because their identities were stolen.

Lifelock founder (Robert Maynard Jr.) resigns, while Fred Thompson takes heat for pitching the company

Kim Zetter from Wired News announced this today:

LifeLock co-founder Robert Maynard, Jr. has resigned from his position with the identity theft protection company following a story published in the Phoenix New Times about his past, which I wrote about last week. CEO Todd Davis left me a voicemail message this morning saying, "Even though we found no merit to any of the claims made by the New Times article . . . Robert Maynard has chosen to step down from the company so we don't allow any distractions or anyone have the ability to question the integrity of LifeLock and our service offering. . . . He is now no longer an executive or officer of the company as of this time."

Although, reading further, it appears Robert will still have something to do with the company:

Davis acknowledged that Maynard, Jr., still owns 10 percent equity in LifeLock and that he is launching a marketing company. When asked if Maynard will work as a contractor for LifeLock doing the same marketing work he was until now doing as a staff member, Davis said yes.

The article also revealed that Todd Davis, LifeLock's CEO -- who post's his own social security number all over the place, to market LifeLock's services -- recently became an identity theft statistic, himself.

Interesting read from Kim Zetter, here.

Meanwhile, Fred Thompson is taking heat for pitching Lifelock. Not sure if this is really fair. A lot of news organizations and other radio personalities from Rush Limbaugh to Howard Stern (strange combination) have pitched Lifelock in the past.

Why is everybody picking on Fred, and Fred, only?

MSNBC story, here.

To read the original post, I did on Lifelock, click here.