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LifeLock CEO addresses lawsuits and critics head on
Posted by Joe on June 20th, 2008
LifeLock CEO Todd Davis addressed rumors and criticisms of his service in a virtual town hall meeting held this morning. The hour long question and answer session was moderated by veteran news man Kevin McCabe and included over 500 hundred registered participants from across the country.
Dozens of questions covering a wide range of topics, including the status of the pending lawsuits against LifeLock and Davis' own brush with identity theft, were asked by the participants and answered in a frank and transparent manner by Davis. Below is a recap of the major topics discussed throughout the town hall meeting.
The LifeLock Service
Davis began the meeting with a recap of the services that LifeLock provides to its subscribers in response to a participant question. According the Davis, LifeLock will:
- Set fraud alerts for each subscriber with each of the three major credit bureaus, including Experian, Equifax and TransUnion. LifeLock will also renew these fraud alerts every ninety days as they expire.
- Scrub subscriber names from the Direct Marketing Association (DMA) mailing lists (what Davis called the "junk mail list") and stop them from receiving most pre-approved offers of credit excluding those sent from financial institutions that the individual already has a relationship with. Davis pointed out that while some people see these mailings as an annoyance, LifeLock see them as "points of vulnerability" for identity thieves looking for potential victims.
- Monitor thousands of "black market sites" on the Internet where criminals buy and sell stolen personal information such as social security numbers, credit card information and other sensitive data with their eRecon service.
- Authenticate any change of address requests made with the United States Postal Service (USPS) using LifeLock's TrueAddress feature.
- Replace any stolen identification, credit cards, insurance cards, social security cards or other similar documents if a subscribers wallet or purse as a part of their WalletLock program.
Davis also discussed their services for children which differ slightly than those for adults. LifeLock's child benefits include monitoring the three credit bureaus and Social Security Administration files to ensure that there are no fraudulent records created using there personal information. Since most children should not have a credit file or work history, any positive hits are likely signs of potential identity theft.
Davis was extremely upfront with the fact that LifeLock is not a silver bullet to prevent all forms of identity theft, but rather a step that consumers can take to greatly reduce the risks of being victimized. "We can't stop all identity theft, but we can put up a great first line of defense", said Davis.
Davis also pointed out that of the over one million active LifeLock subscribers, only 127, or about 0.01%, have been victimized by identity thieves versus the approximately 2.6% of all Americans are victimized by the crime each year according to the FTC. "I guess I can let that stand on its own merits," he said.
The LifeLock Million Dollar Total Service Guarantee
The LifeLock million dollar service guarantee, and more specifically what it would and would not cover, was the topic of many participant questions that followed. In the unfortunately case that a subscriber is victimized by identity theft LifeLock "will do everything the law will allow us to do to make your life better," said Davis.
When asked about whether LifeLock's guarantee covered things such as medical or insurance related fraud, Davis echoed his previous statement that the service can't prevent all forms of identity theft. "But, we will be there to help clean it up," he said.
For more information on the specifics of the LifeLock million dollar total service guarantee please read our previous coverage and analysis.
Todd Davis' Run-in with Identity Theft
Davis was very candid with the details of his own brush with identity theft almost two years ago. A criminal identified only as Daniel from Fort Worth, TX used Davis' social security number, which is prominently displayed in LifeLock's advertising campaigns, to fraudulently secure a $500 pay day loan.
Davis explained that since the payday loan service did not pull a credit report that the fraudulent activity was not caught by fraud alerts placed by LifeLock. However, Davis said that "the service worked exactly as it should". As soon as Davis realized he had been victimized he contacted LifeLock's recovery specialists who successfully recovered his identity. The perpetrator was ultimately caught and charged with the crime by local authorities.
Regarding the rumor of other identity theft crimes perpetrated against him, Davis was very clear that the Fort Worth incident is the only one that he was aware of. He specifically addressed the rumor that dozens of drivers licenses have been issued in his name. "I have seen no evidence of drivers licenses in my name being issued in other states," he said.
Addressing the Lawsuits Against LifeLock
When presented with several questions related to the series of lawsuits pending against the company, Davis encouraged the audience to form their own opinions rather than simply believing the headlines in news reports or press releases. Davis went on to share the fact that there are currently class action lawsuits pending in seven states which only included about nine people. All of the participants in these class action lawsuits against LifeLock are still active members of the service and none of them have claimed to be identity theft victims, according to Davis.
"Look at the facts", he said. "Dig in and look at the details".
The LifeLock CEO also discussed the status of the lawsuit filed by Experian against the company. One of the key claims of that lawsuit is that LifeLock is illegally setting fraud alerts on behalf of consumers with the three credit bureaus, including Experian. Davis commented that LifeLock is comfortable with their legal position and is working within the spirit of the laws that allow for consumers to set fraud alerts. Davis conceded that, "guys like Experian don't like what we do", but also made it clear that he welcomed the opportunity to work with Experian to fight identity theft together and work in the best interest of consumers.
Other Topics
- Davis commented that LifeLock's subscriber base of well over one million continues to grow at a rate of thousands of new subscribers per week. "We set new records for subscribers nearly every day," said davis.
- Davis is very happy with their current association with NASCAR and expects to have an ongoing presence in motor sports. He mentioned that LifeLock was recently the named sponsor of the Michigan 400 and will be sponsoring the LifeLock.com 400 in July.
- When asked about whether or not he would continue to be the face of LifeLock's advertising campaign, Davis eluded to the fact that the company will continue to evolve the campaigns while building on their current success. For example, he pointed out that he probably had "the most famous social security number in the world," so that would probably continue to be a part of their marketing efforts. he did admit that the company's widespread advertising even got to him sometimes. "I listen to satellite radio and even I get sick of hearing me," he said.
We applaud Todd davis and LifeLock for having the courage to address his critics and concerned consumers in such a transparent forum. Davis said he will likely schedule more town hall meetings in the future to keep an open line of communication with consumers. "We want to get the facts out there about LifeLock," he said.
- Debunking the case against LifeLock
- LifeLock to stop setting fraud alerts on behalf of consumers; Launches LifeLock Identity Alerts
- LifeLock launches grassroots campaign to increase consumer awareness of identity theft
- LifeLock's $1 Million Guarantee – Separating Fact From Fiction
- LifeLock CEO to answer questions and address criticisms in town hall meeting this Friday
9 Responses to “LifeLock CEO addresses lawsuits and critics head on”
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June 24th, 2008 at 10:30 am
[...] LifeLock CEO addresses lawsuits and critics head on [...]
June 25th, 2008 at 8:05 am
I think consumers should know that Lifelock is effective only with the cooperation of individuals and businesses. I have had Lifelock for over a year on all four members of my family. I recently purchased a $35,000 car. I never recieved a call from either the dealership that pre-approved the loan for $25,000 nor did I hear from the leanding institution until a week after I drove the car off the lot. The terms of the car sale were negotiated via the internet the dealership did not see me or a photo ID. When I called Lifelock to inquire why I had not been notified about the $25,000 loan in my name they said that car dealerships are notorious for not following through on fraud alerts placed on consumers' accounts. Lifelock assured me that I would have been covered by their million dollar insurance and I would not have been out any money. Sorry consulation for an egregious gapping hole in their service. When I tried to purchase a $200 cell phone with service just months before, I was run through a obstacle course of questions, 2 of which I could not answer. Do any of you know the exact outstanding balance on your home mortgage?
Lifelock's million dollar guarantee is an effective sales tool but stopping the identity theives before they drive away in a new car makes more sense. I will be cancelling Lifelock after the current subscription is over.
June 25th, 2008 at 1:35 pm
Hi Madrid,
Thank you very much for sharing your experiences.
You bring up a good point related to the effectiveness of fraud alerts. If Lenders do not follow standard practices then fraud alerts do very little to prevent identity theft.
I can understand your frustration, but from what you have shared it really seems like the lender, in your case a car dealer, did not take the steps they needed to take in order to protect your identity. When the car dealer pulled your credit report to issue you a loan they saw a fraud alert on your credit report. This alert tells them that you may have been, or believe you may become, a victim of identity theft. In their anticipation of selling you a brand new car they totally ignored the fraud alert and, thus, the LifeLock service was not notified of the transaction.
Luckily in your case it was a valid transaction. But, had an identity thief been successful in securing a car loan in your name the LifeLock service would still have been there to help you. Their million dollar service guarantee is specifically designed to assist in identity theft recovery by doing much of the heavy lifting and absorbing most costs associated with the process.
We look at the track record of LifeLock's service and see that less than 0.01% of their subscribers have been victimized by identity theft. On the other hand, 2-4% (depending of whose numbers you use) of all American's will likely be victimized by identity theft this year.
While no identity theft protection service is perfect, you are certainly less likely to be victimized by identity thieves if you use one. I strongly suggest that you utilize some type of identity theft protection even if you don't feel LifeLock is right for you.
LifeLock has a no hassle refund policy. If you truly are unhappy with their service then you can contact their customer support team at 1-800-543-3562 and they will pro-rate any outstanding charges from the date you cancel.
I also strongly suggest that you contact the car dealership you purchased your new car from and lodge a complaint regarding the fact that they totally ignored the fraud alert on your credit report.
Thanks again for sharing your experience with LifeLock.
Thanks,
Joe Fahrner
NextAdvisor.com
June 26th, 2008 at 2:57 pm
Editor's Note: The original commenter disclosed his connection with Kroll, Inc in the comments below.
Editor's Note: After further investigation we found that this comment was posted by an employee of one of LifeLock's competitors. We advise our readers to take this into account while evaluating the statements below.There is no law that states that creditors must call a consumer if they see a fraud alert on their credit file. All fraud alerts do is ASK the potential creditors to take REASONABLE STEPS to verify that the person in question is who they say they are. This is why fraud alerts (and LifeLock) are not as valuable a tool in preventing ID theft as they are made out to be.
Fraud alerts are not-nor were they ever intended to be- guarantees against ID theft. And no matter how many eyes you have monitoring your credit and personal information; where there is a will to commit the crime, there is a way.
I would also ask why NextAdvisor failed to mention that LifeLocks "$1million Guarantee" only covers id theft in situations where the subscriber can prove that LifeLocks service failed to protect them. Todd Davis's experience with ID theft would not be covered under his own guarantee since PayDay Loans did not check his credit file.
I highly question the objectivity of NextAdvisors reviews of LifeLock services.
June 26th, 2008 at 3:19 pm
Editor's Note: After further investigation we found that this comment was posted by an employee of one of LifeLock's competitors. We advise our readers to take this into account while evaluating the statements below.Wow…Lifelock will keep continuous fraud alerts on my credit files for only $10 a month? That's great!
Let's see, 1.5 minutes to place a fraud alert using Equifax's automated system; 4 fraud alerts per year…that's 6 minutes of my time, or 0.1 Hours.
So: $120 a year for 0.1 hours equals $1200.00 per hour I'd be paying Lifelock. Hmmm, at that rate, I would much rather place the alerts myself and use the money to pull an "Elliot Spitzer".
June 26th, 2008 at 3:35 pm
Hi Tman,
Thanks for the comment.
You are correct that there is no law that requires lenders to call the consumer if a fraud alert is placed on a credit report. I don't believe we have ever stated that there was such a law in our extensive coverage of fraud alerts related to LifeLock or any other identity theft protection service.
A creditor that encounters a fraud alert is asked to use "reasonable policies and procedures" to verify that the person attempting to secure credit is indeed the individual they claim to be. While that is admittedly a broad standard, I don't believe that taking no action all constitutes "reasonable policies and proceedures". Based off of Madrid's original comment it doesn't sound like the car dealer even acknowledged that the fraud alert had shown up at all.
We have stated repeatedly that, as it relates to LifeLock or any other identity theft protection service, there is no 100% effective way to prevent identity theft.
That being said, using a good identity theft protection service certainly makes you less vulnerable than not using one. Less than 0.01% of LifeLock's subscribers have been victimized by identity theft. That is roughly 400X lower rate of identity theft than the general population based off of numbers published by the BBB.
We have covered LifeLock's guarantee extensively on this blog. We have spent hours upon hours researching every aspect and presented the benefits and limitations to our readers on more than one occassion.
You are certainly free to question our objectivity. I would encourage you to spend some more time exploring our coverage before you begin leveling incendiary accusations. Just because we have positive feedback about LifeLock or any other service doesn't mean that we are biased and it is just palin wrong to insinuate otherwise.
Thanks again for sharing your opinion.
Joe Fahrner
NextAdvisor.com
June 26th, 2008 at 3:43 pm
Editor's Note: The original commenter disclosed his connection with Kroll, Inc in the comments below.
Hi Hammer/Tman/Ryan Abbott- what you may not realize is that this blog captures your IP address upon submitting your comment. This IP address tells us that you are either the same person or a group of people posting from the same location.It also tells us that you are posting from what appears to be the Dallas, TX offices of a large risk management corporation that produces an identity theft protection product that is competitive with LifeLock (and which we have recently reviewed on our site).Its childish and in bad form to post anonymous criticize of your competitors. We would open your public feedback should you have the backbone to come out from behind your pseudonyms. However, please don't waste the time of our readers otherwise.Thanks,Joe
June 26th, 2008 at 5:25 pm
Hi Joe,
Full disclosure: I do work for Kroll, a large risk management corporation that produces an identity theft protection product. I do not speak for Hammer, nor have I posted under that name.
I have my own personal blog and a google blogger profile where you can uncover more of my personal info, Tman In Tennessee, but I do not plan on revealing my full Social Security number.
If you wish to shoot the messenger by all means let me give you a bigger target.
You wrote-
I don't believe we have ever stated that there was such a law in our extensive coverage of fraud alerts related to LifeLock or any other identity theft protection service.
Nor have I accused you of doing so, but you made some accusatory comments about the car dealership that implied that commenter "Madrid" had grounds for complaint. Since you were not given full disclosure of the details of Madrid's application for credit -including what REASONABLE STEPS they may or may not have taken to confirm his identity- you don't know whether or not he has grounds for complaint.
While that is admittedly a broad standard, I don't believe that taking no action all constitutes “reasonable policies and proceeduresâ€.
What if the client is an old customer who has been to that same dealership for years and recently placed a fraud alert? There are cases where taking no action all constitutes “reasonable policies and procedures†due to the relationship with the customer. I'm not insinuating this is the case with Madrid, but people need to be aware that fraud alerts are much less stringent than some people make them out to be.
Based off of Madrid's original comment it doesn't sound like the car dealer even acknowledged that the fraud alert had shown up at all.
Nor are they required to if they have taken REASONABLE STEPS to confirm his identity.
We have stated repeatedly that, as it relates to LifeLock or any other identity theft protection service, there is no 100% effective way to prevent identity theft. That being said, using a good identity theft protection service certainly makes you less vulnerable than not using one.
I agree.
Less than 0.01% of LifeLock's subscribers have been victimized by identity theft. That is roughly 400X lower rate of identity theft than the general population based off of numbers published by the BBB.
This is misleading since you are admittedly citing Lifelock's provided victimization rate, not an independent analysis of Lifelock's customers, and then comparing them to an independent analysis from the BBB. I wonder how many people in the BBB survey are Lifelock customers?
Just because we have positive feedback about LifeLock or any other service doesn't mean that we are biased and it is just palin wrong to insinuate otherwise.
The reason why I questioned your objectivity is because by your own numbers you have 27 posts directly discussing Lifelock and the various services they provide, more than all the other programs you've reviewed COMBINED. How else does one read that other than bias? I'm not making accusations of impropriety, I'm questioning if you have spent equal time examining the other available options in ID theft protection and resolution.
Tim O'Donohue
June 26th, 2008 at 8:09 pm
Hi Tim,
I really appreciate you making the introduction and disclosure. Thats important because it does help frame the conversation for readers of this exchange.
I apologize if I erroneously attributed Hammer's remarks to you. The comment came from within Kroll (a corporate IP address that was identical to yours) and within about 20 minutes of your comment. So, I hope you understand that it was an easy mistake to make.
Regarding your specific points:
1) Madrid was/is clearly unhappy with the way the transaction with the car dealership was handled. Since LifeLock has no control over whether or not the dealer takes steps to confirm Madrid's identity, I believe that it would be reasonable for Madrid to take issue with their lack of action (we can certainly disagree on this point). The most important thing to note is that regardless of what happened with the dealer, Madrid stated in his/her comment that LifeLock confirmed that Madrid would have been covered by their million dollar service guarantee had it actually been a fraudulent transaction.
2) I don't believe your scenario applies in Madrid's case because (s)he states "The terms of the car sale were negotiated via the internet the dealership did not see me or a photo ID". That being said, I'll return to the point that had this been a fraudulent transaction, Madrid would have been covered by the LifeLock guarantee. LifeLock would have worked to recover his/her identity and covered nearly all expenses related to the man hour required to do so. Just about the only things that LifeLock would not have covered in this scenario would have been lost wages and restitution for actual funds lost (no identity theft protection service we are aware of, including Identity Theft Shield, covers restitution of lost wages or stolen funds to victims).
3) It is true that the LifeLock failure rate calculation is based off of LifeLock's own numbers. These numbers have been disclosed on some very public stages (including an interview on NBC's Today Show) and there has certainly been ample opportunity to refute their validity. Not even the lawyers involved with the class action lawsuits pending against the company have taken issue with the number of identity theft victims that LifeLock has claimed (and certainly they would have plenty to gain by doing so).
4) We measure each and every service we review by the same set of static criteria. The ratings and rankings of those services are prominently published on our main site at http://www.nextadvisor.com/identity_theft_protection_services/compare.php.
The vast majority of visitors to the identity theft portion of our site visit that comparison page before they visit our blog.
The content covered on our blog is a direct reflection of 1) user inquires and 2) topical developments related to the services and categories we have reviewed. Internally, we receive a disproportionately high number of inquiries related to LifeLock and LifeLock has received a very extensive amount of national coverage over the last several months.
Most if not all of the LifeLock related posts on our blog contain a link to our main identity theft service provider comparison, a link to our detailed review of the LifeLock service (which also contains multiple prominent links to our main service comparison) or both.
We have posted the same type of coverage (if not the same volume) on many of the other 4 and 5 star rated services, such as Identity Guard, Identity Truth and FamilySecure. We spend untold hours keeping up with developments related to every service that we have reviewed and constantly revise our editorial reviews and rankings to reflect the most recent information available. If you had questions, issues or concerns related to any other service we have reviewed elsewhere on the site, I would address those in the same manner as I have addressed your commentary on LifeLock (i.e. explaining and expanding on our opinion of the service).
On a separate note, what do you think the best tools to prevent identity theft? Since we just completed the process of reviewing Identity Theft Shield, I know the service has pretty extensive recovery assistance, decent detection through single or three bureau credit monitoring (depending on the service level that subscribers purchase) but doesn't due much to actually prevent identity theft from occurring. I would be genuinely interested in your opinion either as a Kroll employee or unofficially as simply someone who has a clear interest in the subject matter.
Thanks again for engaging in the dialog.
Joe