By Monica Alonzo
By Stephen Lemons
By Jason P. Woodbury
By Dulce Paloma Baltazar Pedraza
By Ray Stern
By Pete Kotz
By Monica Alonzo
By New Times
The fact that Davis has fallen victim to so many con artists illustrates how LifeLock cannot steel anyone from identity theft. Even with new features intended to improve upon LifeLock's original service, the company failed to save the boss' identity from getting used over and over again.
And, as Davis insisted on the company's Web site, LifeLock customers can expect the same protection he himself has received.
New Times' May 2007 story (linked above) showed how the company used deception and fear to drum up business.
LifeLock's co-founders, Richard Todd Davis and Robert J. Maynard Jr., told reporters across the country that Maynard had once spent a week in the Maricopa County jail, falsely accused of crimes, because his identity had been stolen. The 2003 incident was the inspiration for the company, they said.
Official records and interviews with authorities in Nevada proved the story a fable. Maynard had been arrested and jailed here, all right — because he'd failed to pay back a $16,000 gambling marker at the Mirage casino in Las Vegas. Like bouncing a check, that's a crime. Nevada authorities dropped the charges after Maynard, from his cell, managed to scrape together the cash.
The article also revealed that Maynard, the Valley businessman who was principally behind LifeLock during its 2005 inception, was banned for life in the 1990s from the credit-repair industry.
Then there was this ironic tidbit: Maynard's own father, Valley optometrist Robert Maynard Sr., accused him of identity theft.
Maynard Jr. resigned from the company that June, right about the time news broke of the $500 loan taken out in Davis' name. Before the summer of 2007, LifeLock had received barely a word of negative press. Since then, though, criticism and legal problems have plagued the company on a number of fronts — fueled partly by LifeLock's incessant, in-your-face (or ears, since the firm does lots of radio) advertising.
A follow-up article in New Times, blasted the identity-theft-protection industry itself as a racket and gave examples of bogus claims put out by LifeLock. Blog sites and media outlets scrutinized LifeLock's ads and scolded Davis over the $500 loan from Texas.
There were many arguably excellent reasons not to sign up for LifeLock, critics noted, one of the strongest being that anybody with average intelligence and a computer can perform its most touted service, setting fraud alerts on a personal credit file, for free in minutes. Supposed insiders also claimed LifeLock's customer data wasn't secure, putting customers at risk of the very sort of crime LifeLock purports to prevent.
Lawyers began drawing up class-action lawsuits for aggrieved customers. And Experian, one of the big three national credit bureaus, sued LifeLock in early 2008 over its abuse of a federal law set up to help consumers.
The Federal Trade Commission, despite agreeing with New Times that a case of false advertising could possibly be made on the story of Maynard's jailing, did nothing at the time. Neither did state Arizona Attorney General Terry Goddard.
Meanwhile, LifeLock, founded with millions of dollars in seed money from venture capitalists like Bessemer Venture Partners and Goldman Sachs, kept pumping out ads that grew its customer base to amazing heights.
Despite naysayers' questions, LifeLock boasted in May 2008 that it had signed up its millionth customer. LifeLock was — and remains — a cash machine.
Such phenomenal success helped the company weather its two biggest legal challenges: the first in October 2009, when the company settled with Experian and agreed to stop setting fraud alerts on behalf of its customers; the second when the FTC hit LifeLock with the $12 million penalty.
Though the FTC took all the cash LifeLock had on hand, the settlement didn't stop investors from re-energizing the company with millions of dollars in new capital.
From the start, one of LifeLock's strengths has been its aggressive marketing campaign, and the result hasn't just meant customers. LifeLock has wormed its way into Americana, holding itself up as a beacon of identity-theft awareness and education. It's bought its way onto race cars, the jerseys of the Phoenix Mercury, and onto the signage at US Airways Arena, where the Mercury and Phoenix Suns play.
Davis and LifeLock's marketers, likened to "con artists" by the FTC's chairman, have even ingratiated themselves with law enforcement agencies around the country, using their ill-gotten gains to help pay for identity-theft summits. The arrangements give LifeLock the legitimacy it seeks to counter the claims of consumer advocates.
"They've successfully put the good before the bad," says Robert Siciliano, a Boston author and speaker on identity-theft issues. "That's a strategy that many politicians have perfected. It's one LifeLock has done well with, also."
The FTC settlement is supposed to prevent the company from lying about the effectiveness of its service, but there's a fine line in American advertising as to such things. Authorities vow to keep monitoring LifeLock. In turn, LifeLock will probably try to keep refining its advertising messages — as in the examples of the Web pages taken down after questions by New Times — until it drops off the FTC's radar.
Yet Robert J. Maynard's brainchild thrives mainly because it misrepresents the truth. It has to. Otherwise no one would believe it could keep his or her identity safe, the fundamental concept that drives customers to LifeLock.