LifeLock ads are a talk radio staple. Celebrity endorsements from Rush Limbaugh, Glenn Beck, and others keep the identity protection service in front of millions and millions of right-leaning listeners weekly.
Virginia Attorney Ken Cuccinelli is a favorite of political conservatives. Thanks to his high-profile lawsuits against the Obama administration and the EPA, he's gained stature with the same demographic that frequents talk radio.
But when Cuccinelli assumed his post in 2010, his Office was already investigating LifeLock's business practices. The investigation culminated in a class action lawsuit pitting the Federal Trade Commission and 34 other Attorney's General against LifeLock; a suit that ultimately cost the company $12 million.
We were able to catch up with Mr. Cuccinelli and get an insider's perspective. Here, then, is an attorney's eye view of the LifeLock lawsuit:
The problem, according to Cuccinelli, was not so much that LifeLock offered a flawed service, but that they were misrepresenting the level of security that they in fact provided. For years, LifeLock had been claiming to be an airtight guarantee against all forms of identity theft. LifeLock's service is most effective against new account fraud, which is why members can expect an alert when someone tries to open up a new account in their name. But according to the Federal Trade Commission, the service wasn't as effective in securing customers against the abuse of existing accounts, nor did it offer much protection against medical and employment-related fraud.
- LifeLock protects against (identity theft). Guaranteed.
- Please know that we are the first company to prevent identity theft from occurring.
"Such claims," Cuccinelli said, "are ludicrous on the face."
As a result of the lawsuit, LifeLock was faced with two alternatives; dial back on their advertising claims or bring their service up to the level of security they were claiming to provide. "Obviously, it was easier for them to do the first," he remarked.
The Attorney General told me that he expects consumers to kick tires before they invest in a product. But that doesn't exonerate companies from making false claims. This entire lawsuit, in his judgment, comes back to an issue of consumer protection.
A government shakedown?
With 35 states and one federal agency arrayed against a private enterprise, one of our readers referred to this lawsuit as a "shakedown of monumental proportions." We asked the Attorney General to comment.
"That does happen," he said. "But I don't do it. All we want is for businesses to compete on a level playing field within the boundaries of the law, and God bless whoever wins. But when a company misrepresents themselves as glaringly as LifeLock did, they are going to invite scrutiny."
Political Pressures a Factor?
During our conversation, I had to ask the Attorney General if he ever felt any pressure to back off of the lawsuit because LifeLock, due to their connection with conservative celebrities, was on "his side."
"No, not at all," he replied. "LifeLock is spending money on conservative talk radio because they are reaching for a sophisticated audience; with listeners who think about what they're hearing. As Attorney General, I call balls and strikes. Political support is not an issue. My job is to protect Virginians whether they are Republican, Democrat, Libertarian or Vegetarian."
All of this is not to say that there is no value in a service such as LifeLock's. But it is a reminder that there are no silver bullets in the security industry. Any effective security program must contain as many layers of protection as possible.
"LifeLock has said that about 90% of the members involved in the lawsuit have stayed on as customers,” Cuccinelli told me. "Good for them. As long as they understand what they are getting going forward, LifeLock can be a useful service."
Participants in the class action lawsuit received about $10 each. Roughly enough to reimburse them for one month of service.