The Phoenix New Times has reported that the CEO of LifeLock ID theft protection service of Tempe, Ariz., has had his identity used by rip-off artists 13 times since 2007.
CEO Todd Davis advertised his social security number publically to assure customers that his service could protect their identity. The service cost $10-15 per month.
In March we blogged the story when the U.S. Federal Trade Commission and LifeLock reached a settlement in which the company would pay $12 million – $11 million of which would be refunded to consumers – for fraud.
At that time the FTC said in its news release:
“The FTC’s complaint charged that the fraud alerts that LifeLock placed on customers’ credit files protected only against certain forms of identity theft and gave them no protection against the misuse of existing accounts, the most common type of identity theft. It also allegedly provided no protection against medical identity theft or employment identity theft, in which thieves use personal information to get medical care or apply for jobs. And even for types of identity theft for which fraud alerts are most effective, they do not provide absolute protection. They alert creditors opening new accounts to take reasonable measures to verify that the individual applying for credit actually is who he or she claims to be, but in some instances, identity thieves can thwart even reasonable precautions.
“New account fraud, the type of identity theft for which fraud alerts are most effective, comprised only 17 percent of identity theft incidents, according to an FTC survey released in 2007.”
Apparently, LifeLock can’t even protect against that!
The ID theft incidents involving Davis’s ID that were reported to police and listed in the Phoenix New Times story were:
Reported in 2007:
- A man in Texas used Davis’ ID to get a $500 loan. Davis didn’t know about it until he was contacted by a collection agency.
Reported in 2008:
- Someone in Albany, Ga., opened an AT&T wireless account. Late in 2008, a collection agency contacted Davis to recover $2,390.
Reported February 2009:
- Verizon account opened in New York: $186 unpaid.
- Centerpoint Energy, a utility company in Texas: $122 unpaid.
- Credit One Bank: $573 unpaid.
- Swiss Colony, gift-basket company: $312 unpaid.
- USA Savings Bank credit card account opened (no balance).
- Gap credit card account opened (no balance).
- Bay Area Credit (collection agency): $265.
- Associated Credit Services (collection agency): $207.
- Associated Credit Services (collection agency): $213.
- Enhanced Recovery Corporation (collection agency): $250.
- Enhanced Recovery Corporation (collection agency): $381.
ComputerWorld is running a Q&A piece with LifeLock Inc. CEO Todd Davis that allows him to give his side of the controversy.
Two interesting facts:
- Davis’s take on the $12 million FTC fine: “I am passionate about what we do. [The FTC] didn’t like our choice of words … so they wanted more clarity.”
- He says LifeLock actually has 1.7 million customers.