LifeLock 2015 Annual Report Download - page 275

Case 3:15-cv-00258-HSG Document 49-1 Filed 11/04/15 Page 117 of 289
fraud was discovered from a credit monitoring service or credit report. Similarly, Consumer Reports advises that “credit monitoring is a primitive defense
against ID theft that can scare you with lots of alerts for day-to-day nonfraudulent changes in your credit report – only 1 in 20 alerts is actual illicit activity –
and that can ultimately train you to ignore the alerts.” http://www.consumerreports.org/cro/news/2014/02/expect-less-and-pay-more-with-target-
creditmonitoring/index.htm.
40. Further, LifeLock fails to inform customers that it does not monitor transactions on existing accounts. Indeed, as noted below, approximately
90% of current identity theft incidents consist of fraudulent transactions on existing accounts. However, upon information and belief, LifeLock does not
monitor charges on a customer’s existing accounts. Thus, LifeLock provides zero protection against credit card and bank fraud.
41. In this same vein, LifeLock’s alleged reduction of pre-approved credit card offers is similarly of limited to no value. The essence of this so-called
service is simply LifeLock entering its members’ information at the Consumer Credit Reporting industry at optoutprescreen.com, a process that takes less
than five minutes and that the customer can do by himself or herself for free. Notwithstanding, LifeLock charges its customers approximately $10 to $30
month for this service.
42. Upon further information and belief, LifeLock does not have direct access to financial information. Accordingly, it is dependent on electronic
transfers of data from partners and has no ability to monitor paper forms.
43. In sum, LifeLock’s network does not cover major financial and business institutions and several of the services offered provide zero value to
customers. As such, LifeLock falsely and/or misleadingly advertises its services, as well as charges customers for services that they are not receiving and/or
that are essentially worthless.
B. LifeLock Conceals Wide-Scale Problems of Its “Alert” Services and Regular Code Freezes
44. LifeLock represents that it will keep its customers timely informed through use of its patented “Identity Alert System”. According to its website,
LifeLock promises the following:
1279432.1 - 11 - AMENDED CLASS ACTION COMPLAINT
CASE NO. 3:15-CV-258