Posted on 03/28/2008 6:49:51 AM PDT by APRPEH
PHOENIX, March 28 /PRNewswire/ -- Today an Arizona consumer filed a proposed class-action lawsuit against LifeLock, a heavily promoted company that claims to protect consumers against identity theft. The lawsuit alleges that the three-year-old company defrauds customers by offering services it cannot legally perform, and by touting a $1 million guarantee that the suit alleges is wildly misleading.
Filed in United States District Court for the District of Arizona, the suit seeks to recover money consumers paid to LifeLock.
LifeLock, headquartered in Tempe, Arizona, uses aggressive advertising to entice consumers to sign up for its $10-a-month service which it describes as "proactive identity theft protection, offer[ing] a proven solution that prevents your identity from being stolen before it happens."
Its advertisements prominently feature a supposed $1 million guarantee. In one commercial, Todd Davis, a founder and CEO of LifeLock, announces to a crowd of individuals, "If anything happens for any reason while you're a client of LifeLock, we will cover all losses and all expenses up to one million dollars." On its Web site, LifeLock makes similar statements, claiming that it will "do whatever it takes" to restore a member's good name.
According to the complaint, the fine print says otherwise: LifeLock will not pay any losses directly to the consumer and does not cover consequential or incidental damages to identity theft. The guarantee is limited to fixing failures or defects in the LifeLock services and paying other professionals to attempt to restore losses.
"The fine print in this $1 million guarantee is so limiting, we think it is almost worthless," said Rob Carey, partner in the law firm Hagens Berman Sobol Shapiro, who is representing consumers. "LifeLock buries the truth beneath a pile of inconsistencies and disclaimers so deep that we believe the intent is to mislead consumers so they don't make claims."
LifeLock also misleads consumers about the protections it can provide, according to the complaint. LifeLock's advertising campaign features Davis displaying his social security number, saying, "I'm here to prove just how safe your identity can be with LifeLock - that's my real social security number." Davis claims he can give out his personal information because of his complete confidence in his company's protection.
"What LifeLock doesn't tell you is that in 2006, Davis was a victim of identity theft when a criminal used his social security number to fraudulently obtain a $500 payday loan," said Carey.
According to the suit, LifeLock's "proven solution" consists of illegally placing and renewing fraud alerts under consumers' names with credit bureaus. Under the federal Fair Credit Reporting Act, however, corporations such as LifeLock are not allowed to place fraud alerts on a consumers' behalf - in fact, according to the complaint, the law was written so as to specifically bar credit-repair companies from improperly using fraud alerts.
Moreover, the lawsuit alleges, LifeLock overstates the protection consumers get from fraud alerts.
According to Carey, a fraud alert tells creditors that the consumer does not authorize new credit accounts, new credit cards or credit-limit increases, but, contrary to LifeLock's claims, a fraud alert does not require a creditor to contact the consumer before extending credit, according to the complaint.
They also do not protect against many types of identity theft - as the theft of Davis' identity proves, notes Carey.
"Identity theft is a rampant problem in the United States, and companies that overstate what their services can or will do are as much a part of the problem as the thieves," said Leonard Aragon, another attorney representing the consumers.
According to the complaint, one of LifeLock's founders, Robert Maynard, has been investigated and prosecuted by the Federal Trade Commission and the State of Arizona for fraud in connection with his previous "credit repair" enterprise.
As a result of that investigation, Maynard was banned for life by the FTC from participating in or promoting any credit repair business. When news accounts surfaced recently about Maynard's past, including allegations that he stole his father's identity, Maynard resigned from the company but continued to work as a consultant, according to the complaint.
The suit's named plaintiff, Byrl Lane, bought LifeLock in October 2007, after his car was stolen, and was falsely informed that creditors would have to contact him and that he would be protected against any theft involving his personal data. He was not informed that LifeLock is not authorized to secure fraud alerts on his behalf nor of the stringent limits of the $1 million guarantee.
If approved by the court as a class action, Lane would represent other similarly situated LifeLock customers.
The suit claims LifeLock violated Arizona's Consumer Fraud Act and the Arizona Insurance Code, and seeks to have all members' fees refunded due to the illegality of the contract and LifeLock's misrepresentations about its service.
About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro is based in Seattle with offices in Chicago, Cambridge, Los Angeles, Phoenix and San Francisco. Since 1993, it has developed a nationally recognized practice in class-action and complex litigation. Among recent successes, HBSS has negotiated a $300 million settlement in the DRAM memory antitrust litigation, one of the largest anti- trust settlements in history; a $340 million recovery on behalf of Enron employees; a $150 million settlement involving charges of illegally inflated charges for the drug Lupron, and served as co-counsel on the Visa/Mastercard litigation which resulted in a $3 billion settlement, the largest anti-trust settlement to date. HBSS served as counsel in a $850 million Washington Public Power Supply settlement and represented Washington and 12 other states against the tobacco industry that resulted in the largest settlement in history. For a complete listing of HBSS cases, visit www.hbsslaw.com . CONTACTS: Rob Carey (602) 840-5900 Hagens Berman Sobol Shapiro Rob@hbsslaw.com Mark Firmani (206) 443-9357 Firmani + Associates Inc. Mark@firmani.com
First sued by Experian and now a class action suit.
"LifeLock buries the truth beneath a pile of inconsistencies and disclaimers so deep that we believe the intent is to mislead consumers so they don't make claims."
Most of the services LifeLock performs can be done by consumers on their own.
One of Rush’s sponsors.
Wow! I wonder how Rush Limbaugh will feel about this? A long while back Pat Boone got sued because he advertised a defective product - even though he was hired to do so and had no interest in the company .....
Now will someone go after those “free credit report dot com” people? Stop the earworm!!!
“Now will someone go after those “free credit report dot com” people? Stop the earworm!!!”
If for no other reason than to stop that annoying white guy trying to rap jingle.
Why is there a need for Lifelock? Could it be McCains Illegals?
I don't know that those agencies would charge, but I bet it doesn't require a continuous monthly charge?
I'll have to investigate. ...or does someone already know?
Now instead of looking fly and rolling fat, my posse’s getting laughed at...
I still don’t understand the concept of “identity theft”.
Someone pretends to be me, and you give him some money? Sounds like you got suckered, buddy. What exactly do you expect me to do about it? Pay for your mistake?
The folly is in not requiring proof of identity. (Do numbers and letters really prove I’m so-and-so?) The onus of this foolishness should be on the lender. Who came up with the lame-brained idea that it should land at my feet?!
I gave my bank some money for safe-keeping. If they can’t even verify the identity of someone making a withdrawal, clearly my money is safer in a coffee can buried in my backyard.
My first thought. If he doesn't say something...he'll lose a knotch with me.
I can’t believe I’m saying this, but as far as earworms go, that’s actually one of the wittier ones.
“lookin’ fly an’ rollin’ PHAT” this is why white guys shouldn’t try to rap. Yeah, we should bury these guys alongside the cavemen...IMHO.
Knotch? Did you knot mean notch? You must have had a long knight.
Isn’t the jingle more a takeoff on “rockabilly” than rap?
SD ping, we were just talking about this company.
RS
“The fine print in this $1 million guarantee is so limiting, we think it is almost worthless,”
So, they are suing because they didn’t read the fine print? Just the so called mortgage meltdown today. People should be relieved of their mortgage oblibations because they are too stupid to read the fine print. Let them suffer.
Those commercials are painful to watch.
It would be less painful to watch Helen Thomas getting a leg wax.
Wait a minute - let me rethink that one...
They say a man should always dress, for the job he wants.
So why am I dressed up like a pirate in this restaurant.
It's all because some hacker stole my identity
Now I'm working in this restaurant serving chowder and iced tea
Should'a gone to FreeCreditReport dot com (yeehah!)
Then this would not have hit me, like an atom bomb
They'll monitor your credit and send you free email alerts
So you don't end up working here for tourists in T-shirts. :-)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.