Paying the Pied Piper

Remember Lifelock, the identity protection company whose founder plastered his social security number on billboards across the country?  Turns out it was a scam.  Wired.com reports:

Lifelock promised in ads that its $10 monthly service would protect consumers from identity theft. The company also offered a $1 million guarantee to compensate customers for losses incurred if they became a victim after signing up for the service. The [Federal Trade Commission] (FTC) called the claims bogus and accused LifeLock of operating a scam.

“In truth, the protection they provided left such a large hole … that you could drive that truck through it,” said FTC Chairman Jon Leibowitz…

Small consolation, at least, that the FTC fined these lying thieves $12 million dollars for false advertising.  More satisfying is the reputational fate of founder Richard Todd Davis, who failed to game out all possible outcomes before employing the scam:

In June 2007, Threat Level reported that Davis had been the victim of identity theft after someone used his identity to obtain a $500 loan from a check-cashing company. Davis discovered the crime only after the company called his wife’s cellphone to recover the unpaid debt.

In addition to these amounts, Davis’s credit report showed five collection agencies were seeking other sums from accounts opened in his name: Bay Area Credit was pursuing $265; Associated Credit Services was seeking two debts in the amount of $207 and $213; Enhanced Recovery Corporation was chasing $250 and $381…

According to Wired, Davis’ identity was stolen a total of 13 times.

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