LifeLock

LifeLock Inc. (NYSE:LOCK) is an American identity theft protection company based in Tempe, Arizona. The company offers the LifeLock identity theft protection system, which is intended to detect fraudulent applications for various credit and non-credit related services.

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. .^[1]

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.^[2] They also recently partnered with First Victoria bank in Texas ^[3] and acquired San Diego based ID Analytics Inc. in March 2012.^[4] On December 12th, 2013, LifeLock acquired Lemon Wallet for over $42MM in cash. See

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.^[5]

Lifelock provides a $1 million guarantee in the event of identity theft.^[6] 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.^[6][7]

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]

Former New York City Mayor Rudy Giuliani is the pitchman and is doing TV commercials for the company in 2013.^[13]

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. The company initially expected its initial public offering of 15.7 million common shares to price between $9.50 and $11.50 a share.^[14] On October 3, the company was listed on the New York Stock Exchange and trades under the symbol LOCK, according to its U.S. Securities and Exchange Commission filing.^[15]

Controversies

Pre-2010 controversies

In 2007, the Phoenix New Times reported that the services LifeLock provides are available for free simply by making phone calls. This statement no longer applied when LifeLock changed its service offerings four years ago and therefore the statement has not been valid in quite some time.^[16] These findings were confirmed in 2008 by KGO-TV in San Francisco.^[17][18] Since 2007 the service has significantly changed. LifeLock claims to protect against identity theft with an alert system that is proactive instead of reactive.

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.^[19][20] As part of a 2009 settlement, LifeLock set up a new proprietary service that does not rely on setting fraud alerts.^[21]

In March 2010, LifeLock was fined $12 million by the Federal Trade Commission (FTC) for deceptive advertising.^[22] The FTC called their prior marketing claims misleading to consumers by claiming to be a 100% guarantee against all forms of identity theft.^[23]"^[23] 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."^[24] 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.^[25]

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.^[26]

Maynard spent several days in a Maricopa County jail in 2003 because of an unpaid $16,000 casino marker from The Mirage hotel and casino resort in Las Vegas, Nevada. 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 to spend $20,000 and make many phone calls to clear his name, giving 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.^[1][27]

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 credit 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."^[1][28]

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.^[19] 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.^[17][18] 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.^[24][29][30]

External links

• Official website

References