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LifeLock’s ID protection service not a scam, claims infamous CEO

As CEO of LifeLock Inc., Todd Davis has been in the news lately for all the wrong reasons. Two months ago, the Federal Trade Commission slammed his company with a $12 million fine for deceptive advertising practices.
Attorneys General from several states have dubbed his company’s identity theft protection services a scam. And this week, the Phoenix New Times reported that Davis had been a victim of identity theft at least 13 times, even while he has been busy pitching the effectiveness of his company’s identity protection services.

In this interview, Davis, who is famous for publicly posting his Social Security number on billboards and TV commercials to promote LifeLock, vigorously defended his company and himself. Far from being a scam, Davis insists, LifeLock has been a game changer that has shaken things up in an industry once tightly controlled by the three major credit reporting bureaus.

People are wondering how the CEO of a company which sells identity theft protection services could himself be the victim of identity theft 13 times. What would you say to them?

Here are the facts. We have always said that no one can completely stop identity theft, including LifeLock. We have said on our Web site since inception that there’s no lock that can’t be picked if you were to spend enough time or money. But by going out there and putting ourselves and me specifically, out there with a bullhorn giving out my Social Security number, we got people talking.

We affected a massive change in the industry. Hell, we created the industry. Before, the best service you could get was credit monitoring that you could buy from a credit bureau that sells you a copy of your data that they sell to other people. Now, because of LifeLock, because we’ve stirred the debate, we’ve made the bureaus change their offerings, we made competitors elevate their game for the first time ever. We knew when we started this process that I was going to have issues that would have to be resolved and remediated. We never tried to make the claim nothing would ever happen to me.

What new industry did LifeLock create exactly?

I truly mean identity theft protection. I mean proactive services that attempt to mitigate the risk of identity theft before it happens. Not like credit bureaus which sell your data to you and to anybody else who is qualified to buy it. We were the first ones who actually began to put up a front line of defense to lessen the chance of identity theft.

You talked about the 13 times that we have remediated some kind of issue with me and my identity. [People] have tried hundreds and hundreds of times to steal my identity. The front line of defense works dramatically better than me just waiting for someone to send me a copy of my credit report after I’ve been a victim. We’ve made consumers ask for the first time ‘what can you do to stop it before it happens?’

Some have accused you of being over-enthusiastic in your claims about your service. The FTC hit LifeLock with a $12 million fine two months ago for deceptive advertising. What’s going on?

I am passionate about what we do. [The FTC] didn’t like our choice of words … so they wanted more clarity. For over a year they have been absolutely fine with the way we market our service and what we provide. The fine has to do with historical ways we advertised, not for anything we have done for over a year or for anything we do today.

By the way, one thing you’ll notice in all these stories is, where are the ticked off consumers? If we overinflate what we do, where are all the ticked-off consumers? Because I promise you, New Times doesn’t like us.

Are you are telling me that out of the 1.7 million customers we have, they couldn’t find one to go and interview that said ‘I hate these guys’? That they are a scam and did not provide the service they were supposed to? You are kidding me, right? You know they wanted to find that person who’d say we are bad and evil.

All you ever hear in any of these stories is that [our advertising] could have been misunderstood. OK, then where did we do it? Then show me the evidence that we did it? I didn’t break the law by giving out my Social Security number, but [the FTC] felt like it could have motivated other people to do it. I didn’t see anybody else using a bullhorn or driving around a billboard truck giving out their Social Security number.

But hasn’t LifeLock claimed that its service protects consumers from ID theft from “ever happening” to them, guaranteed?
Just because we say protect, we aren’t saying prevent. We have always provided two layers of protection – proactive and resolution – [which is] our service guarantee to help fix problems if they were to arise. This has been our stance since the beginning, and our many members feel the peace of mind that comes from the service guarantee is as valuable as anything we offer.

In retrospect, was it a good idea giving out your Social Security number?

Yes, it was. I don’t regret it. We made people talk about it and that made them either choose our service or take other action and that’s what we were looking for. We are proudly protecting 1.7 million people. They are loyal and we have great retention because they see great value in us even with all these general claims that are being made about us.

You talked about how LifeLock has forced credit bureaus to improve their services. How’s that?

If you look at some of the new products offerings, instead of it just being a credit report from Experian they have had to up it to a free credit score. They have had to go offer incremental services. They had to go out and start doing more public record searches and be more proactive about looking for solutions. TransUnion has come out with Zendough, which is again not just about them selling you TransUnion profiles about you. They actually have had to go out and start aggregating from other places. They’ve had to elevate their game some, so if you become a victim, someone is truly there to help you. Now they’ve got a long way to go, but they would not have done any of this on their own.

What’s your response to critics who say that a lot of what LifeLock does can be done for free by consumers themselves?

I tell them, I want you guys to keep focusing on the past and we’ll continue to blow by you like we have already done. To any consumer, I welcome you to come and look under the covers. Come check out LifeLock for what we are and the service we provide. We will gladly compare ourselves to any service out there both on the front line of defense and on the back end. In a split second [consumers] will find that they can’t do this for free by themselves.

Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld.

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