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ID-theft protection firm faces lawsuit

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A Maricopa County resident today filed a proposed class-action lawsuit against Tempe-based LifeLock, an identity theft protection company whose CEO prominently advertises his Social Security number to indicate how confident he is in his company's service.

The lawsuit says the company is not legally allowed to perform the service it offers, and the million-dollar guarantee it touts to back up it service has so many limitations that it's worthless.

The suit was filed by Hagens Berman Sobol Shapiro LLP on behalf of consumer Byrl Lane "and all others similarly situated" in U.S. District Court for the District of Arizona and seeks to recover money paid to LifeLock by consumers.

Lifelock CEO Todd Davis said in a prepared statement that the company provides a great consumer benefit and its service is not an insurance product.

Davis said 68 out of the company's 850,000 members have used the guarantee, and all 68 "had their good names completely restored."

"We are puzzled by this lawsuit because the origin and intent clearly have nothing to do with protecting consumers. There is only evidence of the great benefit LifeLock provides to its members," he said.

Experian, one of the three major credit reporting agencies, filed a suit against LifeLock last month in U.S. District Court in California, alleging the company violates the Fair Credit Reporting Act by placing fraud alerts on behalf of consumers and then renewing them in perpetuity.

The Arizona lawsuit makes similar allegations and also claims that LifeLock overstates the protection consumers gain from such fraud alerts.

Davis in his statement did not address the issue of fraud alerts.