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LifeLock Spokesperson's Stolen ID Inspires Lawsuits

Posted by timothy on Thu May 22, 2008 01:34 PM
from the now-he-is-a-formless-protoplasmic-blob dept.
OrochimaruVoldemort writes "It seems as though LifeLock isn't as secure as Todd Davis makes it out. According to a LifeLock spokesman, his identity has been stolen. For two years, Davis has been daring hackers to steal his ID. Looks like he got what he wanted. CNN reports: 'Now, LifeLock customers in Maryland, New Jersey and West Virginia are suing Davis, claiming his service didn't work as promised and he knew it wouldn't, because the service had failed even him.'"
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  • Isn't this old news? (Score:5, Informative)

    by ngth82 (1261748) on Thursday May 22 2008, @01:35PM (#23509072)
    Isn't this old news? I thought I read about this months ago.
    • The news is... (Score:5, Informative)

      by dhj (110274) * on Thursday May 22 2008, @01:58PM (#23509400)
      The new news is that he is being sued. The old news is that identity thieves took his identity. The summary mentions the new part, but the title is poorly chosen. From TFA:

      - Atty David Paris is seeking class action lawsuit against founder Todd Davis in MD, NJ and WV for

      - Also being sued in AZ over the 1 million dollar "service guarantee" because it is being misrepresented and only covers "defects in lifelock's service" and not actual identity theft. which they are misrepresenting.

      - Experian is accusing LifeLock of deceiving customers about their breadth of service because all they do is put a fraud watch on your credit record every 90 days which is something anyone can do with the agencies for free themselves. The only thing this protects you from is credit fraud which where an initial credit check is performed -- and incidentally means if you actually want a change in credit, a cell phone, car, etc you have to contact the credit agency ahead of time so they will allow it.

      --David

      • by frank_adrian314159 (469671) on Thursday May 22 2008, @02:11PM (#23509616) Homepage
        The new news is that he is being sued. The old news is that identity thieves took his identity.

        Well, then, he doesn't have to worry, then, huh? Because they'll be suing the thieves! Right? Right?

      • Re:The news is... (Score:4, Interesting)

        by Jason Levine (196982) on Thursday May 22 2008, @02:52PM (#23510256) Homepage
        Fraud watches aren't 100% security from credit fraud also. A fraud watch is actually voluntary. It means that the credit issuer should be careful and double-check whether a certain application is really from the person it claims to be from. However, some issuers ignore the fraud watches and will issue the credit anyway.

        The best protection is freezing your credit. That way, no one can check your credit or add new lines of credit. If you want to do anything involving your credit (open a new credit card, get a loan, get a background check), you would then need to unfreeze your credit and refreeze it when the activity was completed. Unfortunately, this costs $5 per action per agency per person. So if a husband and wife want to freeze their credit, it is $5 * 3 (credit agencies) * 2 (people), or $30. If they then want to unfreeze their credit, get a car load, and then refreeze their credit, it would cost $60.

        There was a bill awhile back that would have made this free, but the credit industry lobbyists got it killed. After all, if you freeze your credit then you can't sign up for a new credit card at the checkout line of a store to get 10% off your purchase. And that means that you are less likely to have lots of credit card debt interest to pay off. And that means less profits for them.

        As far as ID theft is concerned, they honestly don't care. If your identity gets stolen, it's your problem. You need to spend the time and money to prove to them that something went wrong. Any losses due to cards issued during ID theft are written off (or sent to a collection agency to hassle the ID theft victim and further negatively impact their credit rating).

        Todd Davis is just lucky that he wasn't a victim of Criminal Identity Theft [blogspot.com].
        • Re:The news is... (Score:5, Informative)

          by orclevegam (940336) on Thursday May 22 2008, @02:28PM (#23509866) Journal
          You need to go to the credit reporting agencies directly not through intermediaries. Since there are three major agencies you'd have to contact them separately and sign up for each of their credit protection plans. This shouldn't be confused with the "credit protection plan" that the credit card companies are always trying to shove down your throat, or similar services for other companies, as the former is really a form of insurance in case you become unemployed or otherwise unable to pay off your card for a time, and the later are just companies that are trying to make money by offering a centralized more "convenient" way to sign up for the free fraud reporting offered by the credit agencies (for a monthly fee naturally).
        • by j00r0m4nc3r (959816) on Thursday May 22 2008, @03:10PM (#23510534)
          What are these free ones? The only ones I see claim to be free then sign you up for a monthly fee on your credit card.

          Send me $10 and I'll tell you about the free ones.
        • by ehrichweiss (706417) on Thursday May 22 2008, @02:32PM (#23509928)
          His identity was stolen pretty quickly after he started advertising his SSN. I read elsewhere that his credit is sooo screwed up that the major agencies report his DOB as around 1943 or something and that there have been no less than 5 drivers licenses issued under his identity in various states. That doesn't sound like it remotely did what it was supposed to.
        • good example of how litigious our society is

          I understand where you are coming from, and I agree, but torts are way down on the list of court reform issues that need to be addressed. Federal, State, and local Attorney's offices are the worst offender here, with large companies being a close second. Our criminal justice system is basically a plea bargain system now, it's so gamed and rigged by the DA's that any notion of a person accused of a crime having a 'fair day in court' is reserved only for the very rich who can afford $50,000+ lawyers. The RIAA, MPAA with their frivolous lawsuits are just as bad.

          The common thread here is that the courts have become another way to abuse everyday citizens in our country for political and financial gain, or even worse, for Public Relations.

          To the lawsuits mentioned in this story, I think the litigants in this lawsuit deserve their day in court. Part of me is glad his identity was stolen. Anyone who knows about how identity theft works (even at a cursory level), knows that the services this guy was pedaling were complete vaporware. His company was taking advantage of a climate of fear and he inadvisably believed his own hype. Granted, courts do get it very wrong sometimes, and we always need to make sure we provide ways to rectify those situations, but I do not think this case is in that territory.

          It is wrong to mislead people using their irrational fears and ignorance. Yes. It is wrong. Alot of people in our society seem to think that it's ok to do this...that's what I think needs reform!
        • We seriously need tort reform in this country. That's the real story.

          This looks like a silly lawsuit to me, and there certainly are silly lawsuits. But "tort reform" as pushed by Bush and his cronies is not necessarily the answer. In Texas, thanks to tort reform, a physician could literally operate on you totally stoned and maim you for life, and the damages you can recover are so severely capped that it wouldn't be worth it to sue him (meaning it will be hard to get a lawyer to take the case if you can't pay hourly). That's not a bug. That's a feature.

          The intended effect of tort reform is to place a controlled value on the variables. Mr. Executive says, "If we do this evil thing [sell a dangerous vehicle or drug, for example], how much money will we make?" Bean counter says, "We will make $300 million and it will maim and/or kill a bunch of people." "How much will the law suits cost us?" Without tort reform, the bean counter has to answer, "I don't know. Juries are unpredictable." But with nice, tidy hard-capped damages, he can answer something like, "Our maximum exposure will be $150 million." "Great! Let's do it!" And we're off.

          And lest you think I'm just a bitter litigator who had his livelihood yanked out from under him, I'm not. I am a patent attorney. I don't do personal injury. I hate torts. I've just seen the statutes that were spoon fed to the Texas legislature by the insurance lobby. Tort reform is not your friend if you are not a tortfeasor.

          • I guess you should look at their site and read what they are claiming. Of course they could have changed things because of the court cases but it seems pretty clear to me. First, they are claiming that if their service fails they will pay up to 1 mill to set it straight. You would know it failed when there wasn't a fraud alert on your credit report when something happens. At least that is the way it is represented as of now.

            So if a clerk fails to check ID or doesn't run the credit report, their service worked and it was a failure outside it. But supposedly, they contest it for you and all you have to do is tell them about it.

            The CEO even claims the Texas incident is proof life lock works because the clerk failed to verify the guys identity and the service took care of everything for him. He wasn't out a dime more then the cost of the service and didn't waist any time with the incident.

            Second, It says it stops you from being a "victim of identity theft". That could be interpreted in many ways. Is a victim someone who has had someone else attempt to use their personal information or is a victim someone who has had to pay fees and spend endless hours as well as being denied a loan for something else because someone used their personal information. It is sort of like if someone attacks you and punches you. You would/might be a victim unless you signed up for a cage match or knowingly stepped in a boxing ring as an opponent of someone skilled in that art. You would/might be a victim if you were minding your own business, you probably wouldn't be one if you punched the other guy first. So there is some interpretation going on here.

            From the adds, I agree with you. But after reading their website lifelock.com , I'm not sure if that really is the case. I think it will be interesting to see what the courts determine.
  • They stopped running all those adds on TV.
  • TWO FREAKING YEARS (Score:4, Insightful)

    by Gotung (571984) on Thursday May 22 2008, @01:38PM (#23509114)
    The guy has been throwing out his social security number (often in television advertisements) for 2 whole years and only once did anybody end up getting any money out of it.

    And that person got it from a payday check cashing place at that.

    Not exactly a reputable type of business in general.

    I'd say his service works pretty well based upon that track record.
    • Uh, yeah, but there are a LOT of payday check cashing places.

    • Um, actually... (Score:5, Informative)

      by RandoX (828285) on Thursday May 22 2008, @01:44PM (#23509236)
      According to The Consumerist [consumerist.com], "...the CEO's personal information is currently being misused by at least 20 different identity thieves"
    • Re: (Score:3, Informative)

      It says it prevents identity theft, not that it prevents people from obtaining loans in your name. The articles all mention that a lot of people (at least 20, but possible many more) have obtained drivers licenses using his SSN, and many more attempted to but were unsuccessful. Further there service won't protect you from someone using your identity to obtain a job, or several other types of identity theft that don't directly impact your credit report. There's also the fact that they're charging for a servi
      • Exactly. All this company is doing is periodic credit report checks and to put a credit lock on the customers credit information. All of this the consumer can do on their own for a fraction of the cost and will be just as secure. But then again companies like LifeLock would rather you not know about these options since you no longer line their pockets.
    • by XorNand (517466) * on Thursday May 22 2008, @02:11PM (#23509622)
      This "service" is simply placing a fraud alert on your credit report. When a creditor pulls your report, they see this alert which means they ought to do a bit more manual verification of your ID before granting credit. Most creditors will go the extra mile to win the business, but some of them will just throw the credit app in the trash. The bureaus have been bitching left and right about Lifelock, because they're gaming the system. A FA is only supposed to be used if a credit report (CR) is suspected of containing fraudulent information. Anyhow... the point is, you can call a credit bureau (Experian, Equifax, or TransUnion) and place a FA on your file for free. You don't even have to call them all, a FA will in short time propagate to all three.

      (Note: a FA is different from "freezing" your CR, which prevents it from even being pulled at all by potential creditors. A freeze is a one-time fee ($10 I think) and is an even better protection against ID theft than a perpetual FA. The downside is you have to pay that $10 per bureau and it can be a pain in the ass if you ever to legitimately apply for credit.)
  • Duh. Just Duh. (Score:3, Insightful)

    by Frosty-B-Bad (259317) on Thursday May 22 2008, @01:41PM (#23509164) Homepage
    who really thinks some 3rd company can block all access to your information? Even if they had access to your credit file, its all in the past, so it would take a month to figure it out, while your credit score gets lowered, then all this company could do is pay to fix/remove it, more like insurance than any sort of blocking; then the "big 3" credit mongrels will sort out the problem after said company contacts them, and after I'm sure you have to call/fax them all this info, signed in triplicate, so in the end you just gave LifeLock money for a false feeling of security, because they have no higher ability to repair your credit file than another one has to destroy it. think about it people. Really?
  • by Jhon (241832) * on Thursday May 22 2008, @01:41PM (#23509166) Homepage Journal

    Davis acknowledged in an interview with The Associated Press that his stunt has led to at least 87 instances in which people have tried to steal his identity, and one succeeded: a guy in Texas who duped an online payday loan operation last year into giving him $500 using Davis' Social Security number.
    One out of 87 -- and that guy only succedded in getting $500.

    Davis learned about the fraud in Texas when the payday-loan outfit called to collect on the loan, he said. He didn't get an alert beforehand because the company didn't go through one of the three major credit bureaus before approving the transaction.
    Ok... so it's not perfect -- but it sounds like the service would stop major ID theft attempts...
  • by webrunner (108849) on Thursday May 22 2008, @01:41PM (#23509168) Homepage Journal

    claiming his service didn't work as promised and he knew it wouldn't, because the service had failed even him.


    Isn't the fact that he got his identity stolen due to use of the system more or less hard proof that he didn't know it wouldn't work?
  • Identity? (Score:4, Funny)

    by amccaf1 (813772) on Thursday May 22 2008, @01:43PM (#23509204)

    Now, LifeLock customers in Maryland, New Jersey and West Virginia are suing Davis[...]
    Gee, let's hope they sue the right guy... They might accidentally sue the guy who stole his identity!

  • by sakdoctor (1087155) on Thursday May 22 2008, @01:44PM (#23509238)
    ...cause seriously, it's bullshit. I mean this idea that my "identity" can be stolen. What this seems to be about to be is accountability. If a bank gives out money because someone duped them into believing that they were me, then the buck should stop with them. Their fuck up, their loss in a sane world.
    • by orclevegam (940336) on Thursday May 22 2008, @02:09PM (#23509574) Journal
      And you can go to court and prove you're not responsible, but the monetary damages aren't the real problem. The problem arises because of the centralized credit agencies that score your "risk" for various banks and lenders. It doesn't matter if you never have to pay the money if your credit score is so abysmal you can no longer take out a loan for a new car or house. Not to mention there's the legal fees of proving you didn't do it even if it's fairly trivial to do.
  • In other news ... (Score:3, Insightful)

    by wsanders (114993) on Thursday May 22 2008, @01:44PM (#23509240) Homepage
    .. I drove my car into a tree at 70 MPH and I got hurt. Fuckers!

    Although you do have to be a bit of chump to pay $10 per month to lock your credit, the value is that the company will do all the work if your identity does get stolen. So unless the company is incompetent at that, I declare these people to be a bunch of whiners, with some ambulance chasing douchebag lawyer probably promising them great riches if they win.
      • Re: (Score:3, Informative)

        Except the lifelock guarantee says nothing of the sort. Just like the auto companies advertise only that their cars have safety features, not that they will protect me under all circumstances. Their guarantee even foresees that customer's identities will be stolen.

        http://lifelock.com/lifelock-for-people/how-we-do-it/how-does-the-guarantee-work [lifelock.com]:

        "Our Total Service Guarantee is simple. In the unfortunate event your identity is misused while you are a LifeLock member, we will reimburse direct expenses you incur
  • by Anonymous Coward on Thursday May 22 2008, @01:44PM (#23509242)
    1) Goto: https://secure.lifelock.com/enrollmentform.aspx [lifelock.com] 2) Enter ' or 1=1 or ' quotes included as the promo code. 3) ??? 4) Profit
  • by sm62704 (957197) on Thursday May 22 2008, @01:49PM (#23509292) Journal
    For two years, Davis has been daring hackers to steal his ID.

    Child's play. I bet you dumbsassses aren't good enough to shuttle $5,000,000 into my bank account, losers! I dare you! I double dog dare you!
  • by bcrowell (177657) on Thursday May 22 2008, @02:02PM (#23509474) Homepage

    There are some pretty straightforward things you can do to protect yourself from identity theft, without paying any money.

    You can opt out of getting unsolicited credit card offers at optoutprescreen.com [optoutprescreen.com]. (Here [ftc.gov] is a link to them from an FTC web page so you can tell they're legit.)

    You can also make a habit of getting an annual free credit report from annualcreditreport.com. [annualcreditreport.com] This can help you to detect if something goofy is going on. (Link from FTC [ftc.gov]. It's run by the credit reporting companies, and as you go through the process, they'll try hard to sell you on getting non-free services as well. You have to watch carefully, and not accept the defaults.)

    IIRC there is also a process for locking your credit reports completely, but it costs money unless you can demonstrate that you've already been a victim of fraud.

  • by Ron Bennett (14590) on Thursday May 22 2008, @02:32PM (#23509922) Homepage
    Ironic to read that Experian is complaining about LifeLock's practices when, in my view, Experian itself engages in deception far worse with their costly FreeCreditReport.com website that many people confuse with the truly free AnnualCreditReport.com.

    Ron
  • HA!!! Goes to show (Score:3, Insightful)

    by kcredden (1007529) on Thursday May 22 2008, @03:09PM (#23510530) Homepage
    As soon as I started hearing this, I thought this is a load of...well you know. I knew very well, there is no way possible that you can make an unhackable Internet connected computer system, at least not without HUGE costs (government maybe?) Especially because the way these companies do it. I doubt there was any encryption, much less firewalling, and other security. Just goes to show, P.T. was right on the money here. Best way to not be ID ripped off? Don't store your ID online, period. No cracker can get in, if it's not connected to the net. - Kc
  • by DiscipleN2k (914143) on Thursday May 22 2008, @03:16PM (#23510614)
    Step 1: Call Experian (1-888-397-3742) and have them put a fraud alert on your file. They'll pass it on to the other 2 credit bureaus (Equifax: 1-800-525-6285 & TransUnion: 1-800-680-7289).

    Step 2: Repeat step 1 every 90 days.

    Step 3: Save $120 a year by doing everything LifeLock does all by yourself.

    (I know, I missed the obvious, "Step 3: Profit!" joke)
  • by slashname3 (739398) on Thursday May 22 2008, @07:23PM (#23513032)
    HA HA!
    • Re: (Score:3, Insightful)

      I can't decide if this is someone trolling, a clever personal attack (utilizing /. to do your dirty work), or a genuine moron.
    • Re: (Score:3, Insightful)

      Similarly, I have it on good information that certain businesses calling themselves "taxi services" charge a few dollars per trip to convey people from one location to another, even though consumers can walk for free.

      Great, and when you hire one of these so called "taxi services" and they show up with a rickshaw and you get there at walking speed, are you going to feel cheated? After all, they never guaranteed a specific speed, and they got you there at exactly the same time as if you'd walked yourself,