LifeLock 2015 Annual Report Download - page 284

Case 3:15-cv-00258-HSG Document 49-1 Filed 11/04/15 Page 126 of 289
E. LifeLock Uses Statistical Analyses and Testimonials to Mislead Consumers of the Risk of Identity Theft and the Benefits and Results of
LifeLock’s Services
80. Upon information and belief, the foundation of LifeLock’s marketing strategy is the use of misleading statistics and testimonials, as well as other
scare tactics.
81. More specifically, on its website, LifeLock proclaims that “according to the Department of Justice, approximately 16.6 million Americans were
victims of identity theft in 2012, sustaining more than $24 billion of economic losses.” (citing “Victims of Identity Theft, 2012,” Department of Justice,
2012).
82. At the same time, LifeLock assures that “[w]ith approximately 3 million LifeLock members, we’re committed to providing our consumers peace
of mind amid the growing threat of identity theft.”
83. However, LifeLock’s statistics are misleading at best. In point of fact, in a 2014 report on industry statistics, Javelin Research reported that 88%
of all U.S. fraud loss was related to fraud on existing accounts and that new account fraud has fallen to “historic lows.” In this same report, Javelin found that
the incidence of new account fraud was only 0.5% in 2013, down from 1.2% in 2012. Javelin further determined that new account fraud is rapidly declining
because financial institutions have made it more difficult for criminals to open fraudulent accounts.
84. However, LifeLock makes no differentiation in its marketing. This is undoubtedly because LifeLock does not monitor charges on customers’
existing accounts, only on new accounts. Stated another way, LifeLock does not protect against those instances where someone steals your credit-card
number and begins making purchases with that information. Thus, LifeLock’s services only pertain to a fraction of a percent of current identity theft trends.
85. Notwithstanding the small umbrella of protection actually provided by LifeLock, LifeLock’s use of such statistics falsely and misleadingly
conveys the message that the scope of LifeLock’s network is more expansive than it actually is, as well as falsely and/or misleadingly conveying the
characteristics of LifeLock’s Membership Plans and its $1 Million Guarantee. In truth, and as further discussed below, LifeLock’s services and purported
patented technology
1279432.1 - 20 - AMENDED CLASS ACTION COMPLAINT
CASE NO. 3:15-CV-258