LifeLock

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LifeLock Inc.
TypePublic (as of October 3, 2012)
Founded2005
HeadquartersTempe, Arizona, United States
Websitewww.lifelock.com
 
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LifeLock Inc.
TypePublic (as of October 3, 2012)
Founded2005
HeadquartersTempe, Arizona, United States
Websitewww.lifelock.com

LifeLock Inc. is an American identity theft protection company based in Tempe, Arizona. The company offers LifeLock identity theft protection system - intended to detect fraudulent applications for various credit and non-credit related services. Lifelock provides a $1 million guarantee in the event of identity theft.[1]

Contents

History

Lifelock was co-founded in 2005 by Robert J. Maynard. According to Maynard, the idea for the company came to him while serving a brief jail sentence for unpaid casino loans made under his name by an individual who had stolen his identity. The accuracy of Maynard’s story and questions about his past later became the subject of controversy, resulting in his resignation from Lifelock. .[2]

In December 2008 LifeLock entered into an agreement with TransUnion, one of the three main credit bureaus, to automate the process of alerting customers of potential unauthorized access via their credit reports.[3] They also recently partnered with First Victoria bank in Texas [4] and acquired San Diego based ID Analytics Inc. in March 2012.[5]

Product

LifeLock currently offers four different products: LifeLock identity theft protection, LifeLock Command Center, LifeLock Ultimate and LifeLock Credit Score Manager. LifeLock identity theft protection consists of identity threat detection technology based on information supplied by multiple vendors including ID Analytics. LifeLock Command Center is an expanded identity theft protection service that claims to monitor public records, and LifeLock Ultimate is their highest-tier protection service claiming to protect against bank account takeover fraud. LifeLock Credit Score Manager is a credit monitoring service.[6]

Lifelock provides a $1 million guarantee in the event of identity theft.[1] The guarantee is that Lifelock will spend up to $1,000,000 on legal and associated fees necessary in restoring a customer's identity. The guarantee does not cover the direct losses such a customer incurs from identity theft or pay restitution to them for money lost.[1][7] This service was used three times from 2005 to 2007.[2]

Marketing

LifeLock has partnered with major banks, national corporations and has celebrity endorsers. LifeLock advertises heavily on the Internet and radio; its ads can be heard on Paul Harvey and Rush Limbaugh shows. Celebrity spokespersons for LifeLock have included Howard Stern, Paul Harvey, Mark Levin, and Rush Limbaugh. During the sponsor boycott of the Rush Limbaugh radio program that followed the Sandra Fluke controversy, LifeLock was one of the few national advertisers to choose to remain with the program.[8] LifeLock is also active in many community groups including the National Organization for Victim Assistance (NOVA) and Junior Achievement.[9]

In June 2009, the WNBA's Phoenix Mercury and LifeLock entered into a multi-year marketing partnership to launch the first branded jersey in WNBA.[10] LifeLock also has an ongoing relationship with American Airlines via their AAdvantage program [11] as well as a partnership program with Northrop Grumman.[12]

Public offering

On August 28, 2012, LifeLock announced its plans to take its identity theft protection business public and filed for an initial public offering worth up to $175 million dollars. The company would be listed on the New York Stock Exchange and would trade under the symbol LOCK, according to its U.S. Securities and Exchange Commission filing.[13] The company expects its initial public offering of 15.7 million common shares to price between $9.50 and $11.50 a share.[14]

Controveries

Service controversies

In 2007, the Phoenix New Times reported that the services LifeLock provides are available for free simply by making phone calls.[15] These findings were confirmed in 2008 by KGO-TV in San Francisco.[16][17] Since 2007 the service has significantly changed. LifeLock claims to protect against identity theft with an alert system that is proactive instead of reactionary.

In February 2008, the credit information company Experian sued LifeLock for fraud and false advertising. Experian alleged that LifeLock placed false fraud alerts on behalf of its clients, thus keeping LifeLock clients' files in a constant state of alert.[18][19] As part of a 2009 settlement, LifeLock set up a new proprietary service that does not rely on setting fraud alerts.[20]

In March 2010, LifeLock was fined $12 million by the Federal Trade Commission (FTC) for deceptive advertising.[21] The FTC called their prior marketing claims misleading to consumers by claiming to be a 100% guarantee against all forms of identity theft.[22]"[22] FTC Chairman Jon Leibowitz, referring to the LifeLock TV ad showing the truck, said that "the protection they provided left such a large hole ... that you could drive that truck through it."[23] LifeLock agreed to pay $12 million to settle charges, by the FTC and 35 states, that the company's identity theft prevention and data security claims were false.[24]

Robert J. Maynard Jr.

Robert J. Maynard, Jr., one of the co-founders of the company, resigned in June 2007 amid questions about his past and the integrity of his story regarding his founding of Lifelock.[25]

Maynard spent several days in a Maricopa County jail in 2003 because of an unpaid $16,000 casino marker from The Mirage. Under Nevada law, casino markers are considered the same as checks. According to Maynard, the unpaid casino loans were made by someone who stole his identity, forcing him spent $20,000 and make many phone calls to clear his name – which gave him the idea of LifeLock as a way to help others from being victimized. An investigation by the Phoenix New Times however, verified the $16,000 casino marker actually was his. Video recordings showed that Maynard was at The Mirage at the time of the loan; The Mirage also had a copy of Maynard's Arizona driver's license when it made him the loan, confirming the debt was his. The charges were ultimately dismissed after Maynard repaid the marker, and Maynard has no criminal record. Maynard no longer has any affiliation with LifeLock.[2][26]

The Phoenix New Times also found that Maynard had been banned for life from the credit-repair industry after an agency he owned was shut down for numerous deceptive practices. It also found evidence that he ordered an American Express card in his father's name and accumulated $150,000 in fraudulent charges. That allegation was eventually denied publicly by Maynard's father and reported by the "Phoenix New Times." [2][27]

Todd Davis

LifeLock's CEO Todd Davis publicly posted his Social Security number on billboards and in TV commercials as part of a campaign to promote the company's identity theft protection services. In 2007, it was reported that Todd Davis became the victim of fraud when someone used his published social security number to obtain a $500 loan.[18] LifeLock apparently investigated the crime and found the alleged criminal. In an agreement with LifeLock, the alleged identity thief agreed on camera to perform community service to avoid prosecution.[16][17] In total, Davis was a victim of identity theft 13 times during 2007 and 2008 as a result of the advertising campaign - with the total losses in the low thousands of dollars.[23][28][29]

External links

References

  1. ^ a b c Zetter, Kim (2006-02-16). "LifeLock Helps Guard Your ID". Wired. http://www.wired.com/science/discoveries/news/2006/02/70226.
  2. ^ a b c d http://web.archive.org/web/20080515054659/http://www.phoenixnewtimes.com/2007-05-31/news/what-happened-in-vegas/
  3. ^ O'Grady, Patrick (2008-12-17). "LifeLock, TransUnion team to fight identity theft". http://phoenix.bizjournals.com/phoenix/stories/2008/12/15/daily43.html/. Retrieved 2008-12-18.
  4. ^ Hansen, Kristena (2012-07-10). "LifeLock teams with First Victoria bank in Texas". http://www.bizjournals.com/phoenix/news/2012/07/10/lifelock-teams-with-first-victoria.html.
  5. ^ O'Grady, Patrick (2012-03-14). "LifeLock gets $100 million investment, purchases ID Analytics". http://www.bizjournals.com/phoenix/news/2012/03/14/lifelock-gets-100-million-investment.html.
  6. ^ "LifeLock Services". http://www.lifelock.com/services/. Retrieved 2012-09-16.
  7. ^ http://www.nextadvisor.com/blog/2008/06/16/lifelocks-1-million-guarantee-separating-fact-from-fiction/
  8. ^ "Rush Limbaugh Sponsor LifeLock: Why We're Sticking With Rush". March 5, 2012. http://www.huffingtonpost.com/2012/03/05/rush-limbaugh-sponsor-lifelock_n_1321501.html. Retrieved 2012-03-23.
  9. ^ "LifeLock Community". http://www.lifelock.org/community/. Retrieved 2012-08-27.
  10. ^ "Mercury, LifeLock Break New Ground with Partnership". http://www.wnba.com/mercury/news/lifelock_release_090601.html. Retrieved 2012-08-03.
  11. ^ "LifeLock AAdvantage". http://www.aa.com/i18n/AAdvantage/earnMiles/beyondTravel/financial/lifelock.jsp. Retrieved 2012-07-30.
  12. ^ "LifeLock". http://benefits.northropgrumman.com/Pages/Lifelock.aspx. Retrieved 2012-08-22.
  13. ^ "LifeLock Files Registration Statement for Proposed Initial Public Offering". Yahoo Finance. http://finance.yahoo.com/news/lifelock-files-registration-statement-proposed-213739146.html. Retrieved 29 August 2012.
  14. ^ "Lifelock expects to price IPO at $9.50-$11.50". MarketWatch. http://www.marketwatch.com/story/lifelock-expects-to-price-ipo-at-950-1150-2012-09-19. Retrieved 25 September 2012.
  15. ^ Stern, Ray. Money for Nothing. Phoenix New Times, 2007-07-19.
  16. ^ a b LifeLock still can't protect the identity of CEO, KGO-TV, May 18, 2010
  17. ^ a b Theft protection CEO has identity stolen, [[KGO-TV, March 31, 2008]
  18. ^ a b "Fraud-prevention pitchman becomes ID theft victim". Archived from the original on 2008-05-26. http://web.archive.org/web/20080526075840/http://www.cnn.com/2008/CRIME/05/22/lifelock.flap.ap/index.html?eref=ib_technology. Retrieved 2008-05-22.
  19. ^ "Experian Sues LifeLock For 'Abusing' Fraud Alert System". http://web.archive.org/web/20080528055937/http://www.forbes.com/markets/commodities/2008/02/21/experian-lifelock-update-markets-equity-cx_md_0221-markets32.html. Retrieved 2012-09-11.
  20. ^ "LifeLock, Experian settle case over alerts". http://www.azcentral.com/business/articles/2009/10/23/20091023biz-lifelock1023.html. Retrieved 2009-10-23.
  21. ^ Singel, Ryan (3 October 2012). "LifeLock’s IPO Is Unimpressive, But Not as Bad as Its Checkered Past". Wired. Condé Nast Publications. http://www.wired.com/threatlevel/2012/10/lifelock-ipo/. Retrieved 7 October 2012.
  22. ^ a b Federal Trade Commission, Plaintiff, v. LifeLock, Inc., a corporation; Robert J. Maynard, Jr., individually and as an officer of LifeLock, Inc.; and Richard Todd Davis, individually and as an officer of LifeLock, Inc., Defendants (March 8, 2010)
  23. ^ a b CEO’s Identity Stolen 13 Times
  24. ^ LifeLock Will Pay $12 Million to Settle Charges by the FTC and 35 States That Identity Theft Prevention and Data Security Claims Were False (FTC news release, 03/09/2010)
  25. ^ Casacchia, Chris (2007-06-12). "LifeLock founder resigns amid questions about his past". bizjournals.com. http://phoenix.bizjournals.com/phoenix/stories/2007/06/11/daily15.html. Retrieved 2007-06-19.
  26. ^ Zetter, Kim (2007-06-11). "LifeLock Founder Resigns Amid Controversy". Wired. http://web.archive.org/web/20090505051137/http://www.wired.com/threatlevel/2007/06/lifelock_founde_1/.
  27. ^ http://blogs.phoenixnewtimes.com/valleyfever/2009/06/lifelock_founders_hawaiian_adv.php
  28. ^ LifeLock CEO said to be victim of identity theft 13 times (ComputerWorld, May 19, 2010)
  29. ^ CEO Has Identity Stolen 13 Times, Raises Concern Over LifeLock's Legitimacy – TMCnet, 5/19/10