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Thursday, August 6, 2009

New lawsuit against Lifelock

Consumers have now filed a new lawsuit against LifeLock seeking, among other things, a court order requiring LifeLock to comply with a previous court order and halt fraud alerts. Here's the article:

"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."

If you have been reading this blog, you know that I have a particular disdain for LifeLock (almost as much as I have for Experian, Equifax and Trans Union). My prior posts about what I contend are LifeLock's illegal practices can be found here - http://fcralawyer.blogspot.com/search/label/LifeLock. This new lawsuit bears watching. If any of you out there know any more details about this or other lawsuits against LifeLock, I'd love to hear them.

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