ID-Protection Firm Can't Protect Against Lawsuits

Identity theft prevention company LifeLock is facing lawsuits in three states for false advertising and deceptive trade practices, reports the Associated Press. Class action lawsuits in New Jersey, Maryland and West Virginia claim LifeLock overstated its abilities and misled customers.

When LifeLock CEO Todd Davis gave out his Social Security number in nationwide commercials to highlight the company's identity theft protection service, people were understandably shocked. The company boasts that for $10 per month or $100 annually it will remove the names of customers from junk-mail lists, place credit alerts with all three of the major credit reporting agencies, provide one free credit report annually from each agency, and will pay up to $1 million to cover any fraud-related costs due to failure of its service.

Justin Klein, an attorney for the class-action plaintiffs in New Jersey, says in this Computerworld piece that LifeLock fails to mention some crucial facts about its service. According to Klein, LifeLock's service does not protect against all kinds of identity theft fraud, but only fraud that stems from access to a full credit report. And customers are only eligible for that $1 million reimbursement guarantee in certain, very limited circumstances.

And to add insult to injury, Davis' personal info was swiped from his Web site. According to this INQUIRER article, there have been 87 attempts to use Davis' Social Security number. One hacker was able to bank $500.