Longform

Cracking LifeLock: Even After a $12 Million Penalty for Deceptive Advertising, the Tempe Company Can't Be Honest About Its Identity-Theft-Protection Service

It's been two months since the feds tried to gut LifeLock with a $12 million penalty for deceptive advertising, and the company's Web site still boasts that it can protect people from identity theft.

The Tempe-based company has spent millions of dollars since 2006 on ads that broadcast CEO Todd Davis' Social Security number. Customers pay $10 to $15 a month for the supposed protection — and for LifeLock's "$1 million guarantee" if the protection fails.

On one LifeLock Web page, www.todddavislifelock.com, active until early May, Davis stated that he's "absolutely confident LifeLock is protecting my good name and personal information, just like it will yours."

Davis, a suit-wearing, ever-smiling salesman with short, blond hair, exudes confidence in LifeLock's ads.

But the evidence shows that he shouldn't be the slightest bit confident in LifeLock's ability to protect his name or personal data.

In June 2007, in the wake of a New Times article that exposed how LifeLock was founded with lies, news leaked that Davis had become the victim of identity theft. A man in Texas had used Davis' ID to take out a $500 loan, and Davis didn't know about it until the unpaid account went to a collection agency.

In the following months, Davis and LifeLock worked hard to spin the story into something positive. Davis claimed in an interview with MSNBC in May 2008 that the Texas incident was the one and only time anything like that had ever happened to him.

Another LifeLock page dedicated to Todd Davis, (www.lifelock.com/todd-davis) claimed (until it, like the other Davis page, was removed by LifeLock on May 4 following inquiries by New Times) that Davis "has looked to LifeLock for protection after an identity theft . . . but only once, and LifeLock was there to help."

New Times has learned, though, that the Texas incident wasn't a fluke.

In October 2007, a few months after news broke that Davis had become a victim, someone in Albany, Georgia, opened an AT&T wireless account using Davis' personal info, a Chandler police report shows. (See the PDF version of the report.)

As Todd Davis tried to deflect the bad press in the wake of the Texas crime, the Albany resident was racking up hours on a cell phone in Davis' name.

By the time AT&T cut off the person, he or she had amassed a large, unpaid bill. The amount with which AT&T was stuck wasn't disclosed, but in the fall of 2008, the phone company authorized a collection agency to try to recover a $2,390 debt.

That's when LifeLock and Davis finally learned of the theft.

A LifeLock employee reported the identity crime to Chandler police on November 21, 2008, while Todd Davis was traveling out of state.

After a short time on the case, Chandler forwarded it to police in the Georgia city, which still is still investigating. Phyllis Banks, a spokeswoman for the Albany agency, tells New Times that investigators went to the address listed on the bill and interviewed a local woman, but no arrests had been made.

When Albany investigators phoned Davis about the crime last year, "they were very familiar with him" and how he'd publicized his Social Security number, she says.

"It's unfortunate he chose to conduct business in that way," Banks says. "It's not fair to [AT&T] because they're losing a pretty substantial amount of money."

Yet AT&T wasn't the only company getting screwed by LifeLock's advertising scheme — because plenty more criminals have made use of Davis' data.

Records show that LifeLock representative Tamika Jones called the Chandler PD again in February 2009 to report a slew of fraudulent accounts opened in Davis' name.

As with the AT&T account, the amounts owed on the fraudulent accounts were not revealed in the police report — only the amounts sought by various companies and collection agencies, listed below. Because these companies often forgive or waive a percentage of the bills of debtors, the dollar amount of the losses could easily be higher.

More cell-phone service was fraudulently charged to Davis: Someone opened a Verizon account in New York, leaving behind unpaid bills of at least $186.

An account at Centerpoint Energy, a Texas utility, was opened. At least $122 went unpaid.

Fake Davises owe $573 to Credit One Bank and $312 to Swiss Colony, a gift-basket company.

Two other accounts, one for USA Savings Bank and a Gap credit card, were opened successfully in Davis' name but showed zero balances as of early 2009.

There were also multiple dings by collection agencies: Bay Area Credit, $265; two for Associated Credit Services, $207 and $213; and two for Enhanced Recovery Corporation, $250 and $381. Finally, there was a NCO/Fin 22 collection-agency account for $2,390, which could be the AT&T bill (considering the identical amount).

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.
Contact: Ray Stern