Press Releases

Press Release : LifeLock

Consumer-rights attorneys demand LifeLock follow court order and halt fraud alerts

August 06, 2009

PHOENIX - LifeLock, the Tempe, Arizona-based company that touts identity-theft-prevention services is the target of a consolidated lawsuit claiming that the company misrepresented its product, illegally sold insurance and breached its contracts with customers.

The new consolidated complaint combines 13 lawsuits filed against LifeLock in various jurisdictions and expands the claims against LifeLock, according to Rob Carey, a partner at Hagens Berman Sobol Shapiro and interim lead counsel for the consolidated case.

The lawsuit claims the company defrauds customers by offering services it cannot legally perform and by touting a $1 million guarantee that consumers claim is virtually worthless.

One of the key components of the lawsuit relates to whether LifeLock can lawfully place fraud alerts for consumers. As interim lead counsel for the case, Carey demanded that LifeLock cease placing fraud alerts and advise consumers that the company cannot legally place fraud alerts.

"A federal judge has already confirmed that LifeLock cannot legally place fraud alerts," said Carey. "It's time the company shows some respect for the law, stops placing these alerts and transitions into a more legitimate business model."

The ruling on fraud alerts arose from a suit brought against LifeLock in February 2008 by Experian, one of the major credit reporting agencies. At that time, the agency stopped accepting and renewing requests from LifeLock to place fraud alerts. However, LifeLock continued to collect monthly payments from customers for services, which included fraud alert protection with Experian.

"We intend to show the court that LifeLock's refusal to notify customers of its activities or change its practices violates state and federal laws and demonstrates a clear disregard for its customers," said Leonard Aragon, another HBSS attorney on the case.

Many of the new allegations in the consolidated complaint are related to what the plaintiff's claim is LifeLock's refusal to comply with the Fair Credit Reporting Act (FCRA). The FCRA says that only an individual can place a fraud alert and the Act's language clearly excludes corporations, such as LifeLock from doing so, the complaint states.

"The consolidated complaint is a call for LifeLock to change its business practices to comply with federal law," said Carey. "LifeLock's customers will no longer stand for business as usual."

The suit claims another legal issue with LifeLock is that the $1 million guarantee is an insurance product that must comply with Arizona Insurance Code, but LifeLock fails to even attempt to comply with the Insurance Code's rules and regulations

The master complaint represents current or past customers of LifeLock, with the exception of those living in Maryland or West Virginia.

The lawsuit names several counts against LifeLock, including, violation of the Arizona Consumer Fraud Act, false and misleading advertising of an insurance product, unjust enrichment and breach of contract.

You can view court documents and learn more about this case at www.hbsslaw.com/Lifelock. Any customers interested in participating in this lawsuit can contact attorneys through the Web site.

About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro is a nationally recognized class-action and complex-litigation law firm based in Seattle with offices in Chicago, Boston, Los Angeles, Phoenix and San Francisco. Among recent successes, HBSS negotiated a $300 million settlement in the DRAM memory antitrust litigation, the largest antitrust settlement in U.S. history, recovered $340 million on behalf of Enron employees, and was part of the leadership team in the $3 billion Visa/MasterCard settlement. In pharmaceutical litigation, the firm's recent successes include a $350 million settlement with McKesson, more than $200 million with other parties in drug-pricing litigation, and a $150 million settlement regarding Lupron. HBSS represented Washington and 12 other states against the tobacco industry that resulted in the largest settlement in history. For a complete listing of HBSS cases, visit www.hbsslaw.com.

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