Feds are going after ID theft protector LifeLock: Here's why

Birmingham News ^ | 7/23/15 | Leada Gore

[markomalley]

It seems like every other day there is a report about another cyber intrusion that compromises personal data. There are multiple companies that promise to help protect that information but one, LifeLock, has found itself under fire from the federal government.

Let's talk about that:

First, what is LifeLock?

The proliferation of hacks that have compromised consumer's personal information have many people turning to identity protection through companies such as LifeLock. The Tempe, Arizona-based company was founded in 2005 and went public in 2012. It has offices in San Diego, San Francisco, Irvine and Mountain View, California. The company provides a variety of identity-theft protection services, including alerting LifeLock members to identity-related issues, such as new account openings and credit applications.

By the way...

LifeLock currently has more than three million subscribers that pay between $10-$30 a month for ID protection. The company also has plans for businesses.

The problems all started in 2010

In 2010, LifeLock reached an agreement with the Federal Trade Commission to pay $12 million to settle charges that the company used false claims to promote its identity theft protection services. The settlement barred the company from making further deceptive claims; required LifeLock to take more stringent measures to safeguard the personal information it collects; and required LifeLock to pay refunds to customers.

And now...

FTC said LifeLock hasn't lived up to that agreement and is still deceiving customers about how secure their data is, as well as failing to take required steps related to that information. Specifically, it alleges LifeLock violated the 2010 agreement by failing to establish a system to protect users' sensitive personal data, including credit card, Social Security, and bank account numbers.

According to the FTC, LifeLock also falsely advertised it was protecting customer data at the same level as banks and failed to meet record keeping requirements from the 2010 order.

LifeLock responds

"LifeLock has been up front and transparent that we have been in a dialogue with the Federal Trade Commission for more than 18 months. During this time, we have worked with agency staff and commissioners, striving to come to a satisfactory resolution. Despite our efforts, we were unable to do so," the company said on its website.

"As a result of our unwillingness to agree to an unreasonable settlement, the agency has decided to litigate its claims. We disagree with the substance of the FTC's contentions and are prepared to take our case to court."

So what happens now?

The two sides will have to settle the matter in court. Meanwhile, the news is already hitting LifeLock: in afternoon trading yesterday, its shared tumbled 32 percent to $10.78.

[Ken H]

I use Experian credit monitoring service, which I gather is similar to LifeLock.

I also have a credit security freeze in place with the big 3, which means NO information is accessible from credit inquiries.

[TADSLOS]

Probably going to make fools out of the so-called government cyber security “experts”.

[Auntie Dem]

I think Lifelock is deceptive. I signed up with one of their programs thinking I was going to pay $19.95 a month. I wasn’t paying attention to my bank statements for a month or two, by the time I checked it they had been charging me almost $60 a month! Turns out they upcharged me for a premium program I didn’t want, plus added my wife to it, which I also didn’t want, which doubled the cost.

I would rather have been hacked, the thieves would have stolen less than Lifelock. At least my bank could have recovered what thieves stole.

[old-ager]

Lifelock has heavily advertised on the Rush Limbaugh show.

[Amendment10]

This is déjà vu of Y2K problem.

And there may be a major constitutional problem with federal government investigating this issue. More specifically, LifeLock seems to be providing insurance. And if such is the case, and regardless what lawless Obama’s activist justices want everybody to think about the constitutionality of Obamacare insurance for example, please consider the following.

The Supreme Court has historically clarified that insurance is not commerce but a contract, the point being that Congress’s power to regulate interstate commerce (1.8.3) does not extend to regulating insurance, regardless if parties negotiating insurance contract are domeciled in different states.

"4. The issuing of a policy of insurance is not a transaction of commerce [emphasis added] within the meaning of the latter of the two clauses, even though the parties be domiciled in different States, but is a simple contract of indemnity against loss.” — Paul v. Virginia, 1869.

Note that the states can grant the corrupt feds the specific power to regulate ID theft issues by appropriately amending the Constitution.

But it remains that the legal system’s tradition advice for consumers, “let the buyer beware,” is probably the best remedy for concerns about how LifeLock conducts business.

[catnipman]

lifelock is basically a scam:

http://www.amazon.com/LifeLock-Identity-Theft-Protection-Starter/product-reviews/B004KKSUS0

http://www.consumeraffairs.com/privacy/lifelock.html

http://www.thegeekprofessor.com/lifelock-sucks/

http://www.ripoffreport.com/r/LifeLock/Tempe-Arizona-85603/LifeLock-Service-Doesnt-Work-LifeLock-stores-your-personal-data-on-their-server-LifeLock-334309

https://www.google.com/search?q=lifelock+scam+OR+ripoff&ie=utf-8&oe=utf-8

[TurboZamboni]

So is 1800 Flowers. Horrible experience with them.

[BobL]

They advertise on Rush, par for the course.

[Amagi]

Once upon a time when the government went after an entity it was immediately assumed there was some illegality or impropriety being investigated.
That is no longer the first thought by many Americans, and that is very troubling.