LifeLock

LifeLock Inc.
Public
Traded as NYSE: LOCK
Founded (2005 (2005))
Founders Robert J. Maynard and Todd Davis
Headquarters Tempe, Arizona, United States
Key people
 Todd Davis
(Executive Vice Chairman)
Hilary Schneider
(CEO)
Revenue Increase $587.47 million (2015)[1]
Decrease $-84.75 million (2015)[1]
Decrease $-51 million (2015)[1]
Total assets Increase $592.81 million (2015)[1]
Total equity Decrease $318.07 million (2015)[1]
Number of employees
 788 (2016)[1]
Subsidiaries ID Analytics
Website www.lifelock.com

LifeLock Inc. (NYSE:LOCK) is an American identity theft protection company based in Tempe, Arizona. The company offers the LifeLock identity theft protection system, which is intended to detect fraudulent applications for various credit and non-credit related services.[2][3] In 2015, it was ordered to pay $100 million to settle Federal Trade Commission contempt charges for failing to protect consumer information and deceptive advertising, the largest monetary award obtained by the Commission for an enforcement action.[4]

History

LifeLock was co-founded in 2005 by Robert J. Maynard and Todd Davis. Amid controversy, Maynard left the company in 2007.[5][6] In December 2008 LifeLock entered into an agreement with TransUnion, one of the three main credit bureaus, to automate the process of alerting customers of potential unauthorized access via their credit reports.[7] LifeLock acquired ID Analytics following a round of funding in March 2012.[8] ID Analytics operates as a wholly owned subsidiary of LifeLock.[8]

Following the announcement of the company's IPO in August 2012, Hilary Schneider joined Life Lock as president of the company.[9] Schneider had previously been working with TPG Capital after leaving Yahoo in 2010.[9]

In December 2013, LifeLock acquired Lemon Wallet for $42.6 million.[10][11] Lemon is a digital wallet platform which stores payment, loyalty, and identification cards on members' smartphones.[12] Lemon Wallet Plus was a premium service which offered lost wallet service, account monitoring, and some security measures.[12] Wallet Plus has been folded into a new service offered by LifeLock which includes identity fraud alerts.[12] LifeLock temporarily removed the app from mobile stores in May 2014 when the company learned that certain parts of the app were not in compliance with payment industry standards.[13]

As of February 2014, LifeLock has 3 million subscribers.[14]

In July 2015, CNN reported FTC and 35 State Attorneys General deemed LifeLock violated a previous settlement with the Federal Trade Commission.[15]

In November 2016, Symantec announced its intent to acquire LifeLock for $2.3 billion.[16]

ID Analytics, Inc.

In March 2012, ID Analytics, Inc. became a wholly owned subsidiary of LifeLock.[8] ID Analytics was founded in 2002.[17] It provides consumer risk management with real-time consumer behavior insights and in-depth visibility into identity risk and creditworthiness.[18] Both government agencies and U.S. companies utilize ID Analytics for risk based decision making on revenue enhancement, fraud reduction, cost saving drivers and customer protection.[17]

Funding

The company started with a $2 million in seed funding, with another $5 million in its Series A funding in 2006 from Bessemer Ventures.[19][20] In April 2007, LifeLock raised $6 million in its series B funding from Kleiner Perkins Caufield & Byers.[19] The following January, its Series C Funding ended with $25 million, led by Goldman Sachs Group, Inc.[21] In August 2009, a series D funding round raised $40 million for the company.[22] LifeLock raised $100 million in new equity funding from Bessemer Ventures Partners, Goldman, Sachs & Co., Kleiner Perkins Caufield & Byers, Symantec Corporation and River Street Management in March 2012.[23] The funds were used towards the acquisition of ID Analytics, an identity theft risk prediction technology.[8]

On August 28, 2012, LifeLock announced its plans to take its identity theft protection business public and filed for an initial public offering worth up to $175 million.[24] On October 3, the company was listed on the New York Stock Exchange and trades under the symbol LOCK, according to its U.S. Securities and Exchange Commission filing.[25]

Product

LifeLock offers Standard, Advantage, Ultimate Plus and Junior monitoring services. LifeLock Standard offers identity theft detection and alerts within its network, lost wallet protection, address change verification, black market website surveillance and reduced pre-approved credit card offers.[26] LifeLock Advantage contains everything in the Standard plan plus fictitious identity monitoring, court record scanning, data breach notifications, credit card, checking, and savings account activity alerts, and an online annual credit score and report through Equifax. LifeLock Ultimate includes bank account takeover alerts within its network, enhanced credit application alerts and online credit reports and scores on top of the Standard and Advantage features.[27][28] Its Junior protection provides identity theft detection and alerts, credit file verification, black market website surveillance and file sharing network searches.[29]

LifeLock provides a $1 million guarantee in the event of identity theft.[30] The guarantee is that LifeLock will spend up to $1,000,000 on legal and associated fees necessary in restoring a customer's identity. The guarantee does not cover the direct losses such a customer incurs from identity theft or pay restitution to them for money lost.[30][31]

Marketing

LifeLock has partnered with major banks, national corporations and has celebrity endorsers.[32] In addition to sponsoring NPR programming, LifeLock advertises heavily on the Internet and radio; its ads can be heard on the radio shows of Paul Harvey, Rush Limbaugh, Adam Carolla, Kim Komando and Charles Osgood.[33] Celebrity spokespersons for LifeLock have included Howard Stern, Paul Harvey, Mark Levin, and Rush Limbaugh.[34] LifeLock is also active in many community groups including the National Organization for Victim Assistance (NOVA) and Junior Achievement.[35][36]

Former New York City Mayor Rudy Giuliani is a spokesman and was featured in the company's TV commercials in 2013.[37] LifeLock entered a cross-promotional partnership with Universal Pictures in its 2013 movie Identity Thief.[38]

Affiliations

LifeLock sponsored the NASCAR Chicagoland Speedway LifeLock.com 400 Sprint Cup Series race from 2008 to 2010.[39][40][41]

In June 2009, it announced a sponsorship agreement with the Women's National Basketball Association's Phoenix Mercury. The sponsorship launched the first branded jersey in the Women's National Basketball Association and lasted through 2013.[42][43]

LifeLock has an ongoing relationship with American Airlines via their AAdvantage program[44] as well as a partnership program with Northrop Grumman.[45]

LifeLock's advertising agency of record is Lowe Campbell Ewald.[46][47]

In January 2014, LifeLock announced a new television commercial, called "Do Your Thing", and a redesigned company logo.[48]

Corporate social responsibility

Starting in 2010, LifeLock has partnered with the FBI-LEEDA (Law Enforcement Executive Development Association) to provide educational seminars to law enforcement officials on identity theft.[49] The seminars occur multiple times a year in various regions throughout the United States.[50] In February 2014, LifeLock partnered with the National Parent Teacher Association (PTA) with the goals of helping kids learn safe online habits.[51] In April that year, it entered a partnership with Vivint to offer home and identity protection together.[52]

Controversies

Robert J. Maynard, Jr., one of the co-founders of the company, resigned in June 2007 amid questions about his past and the integrity of his story regarding his founding of LifeLock.[53] Maynard spent several days in a Maricopa County Jail in 2003 because of an alleged unpaid $16,000 casino marker from The Mirage. Under Nevada law, casino markers are considered the same as checks. Maynard came up with the plan for LifeLock while sitting in his jail cell. An investigation by the Phoenix New Times revealed that the $16,000 casino marker actually was his. The Mirage had gotten a copy of his Arizona driver's license when it made him the loan, and charges were dropped after Maynard repaid the marker. The New Times also found that Maynard had been banned for life from the credit-repair industry after an agency he owned was shut down for numerous deceptive practices. It also found evidence that he ordered an American Express card in his father's name and ran up $150,000 in fraudulent charges. Maynard no longer has any affiliation with LifeLock.[5][6]

Also in 2007, Todd Davis publicly posted his Social Security number as part of an ad campaign to promote the company's identity theft protection services. As a result, Davis was a victim of 13 cases of identity theft between 2007 and 2008.[54][55][56] Regarding the campaign, Davis said, "We were trying to make the point that … all it takes is one data breach. The point of that campaign was to take proactive steps to protect your identity."[14]

In February 2008, the credit information company Experian sued LifeLock for fraud and false advertising. Experian alleged that LifeLock placed false fraud alerts on behalf of its clients, thus keeping LifeLock clients' files in a constant state of alert.[57][57][58] As part of a 2009 settlement, LifeLock set up a new proprietary service that does not rely on setting fraud alerts.[59]

In March 2010, LifeLock was fined $12 million by the Federal Trade Commission (FTC) for deceptive advertising.[60] The FTC called their prior marketing claims misleading to consumers by claiming to be a 100% guarantee against all forms of identity theft.[61]

FTC Chairman Jon Leibowitz, referring to the LifeLock TV ad showing the truck, said that "the protection they provided left such a large hole ... that you could drive that truck through it."[54] LifeLock agreed to pay $12 million to settle charges, by the FTC and 35 states, that the company's identity theft prevention and data security claims were false.[62]

In 2015, the FTC found LifeLock to be in contempt of the 2010 agreement, charging that they "failed to establish and maintain a comprehensive information security program", and "falsely advertised that it protected consumers’ sensitive data". The FTC obtained a $100 million monetary penalty against LifeLock to settle the contempt charge.[63] Of that fine, $68 million is to be held for class-action refunds to LifeLock customers.[64]

See also

References

  1. 1 2 3 4 5 6 "Form 10-K". LifeLock, Inc. Securities and Exchange Commission. 2014. Retrieved 27 July 2015.
  2. ↑ Carlson, Debbie (31 January 2014). "Protect financial information from theft". Chicago Tribune. Retrieved 30 May 2014.
  3. ↑ Fox, Emily Jane (19 December 2013). "4 things to do after your credit card has been hacked". CNN Money. Retrieved 30 May 2014.
  4. ↑ "LifeLock to Pay $100 Million to Consumers to Settle FTC Charges it Violated 2010 Order" (press release). Federal Trade Commission. 17 December 2015.
  5. 1 2 Stern, Ray. "What Happened in Vegas..." Phoenix New Times. May 31, 2007.
  6. 1 2 Zetter, Kim (June 11, 2007). "LifeLock Founder Resigns Amid Controversy". Wired. Archived from the original on May 5, 2009.
  7. ↑ O'Grady, Patrick (2008-12-17). "LifeLock, TransUnion team to fight identity theft". Retrieved 2008-12-18.
  8. 1 2 3 4 Leena Rao (15 March 2012). "Identity Theft Protection Company LifeLock Raises $100M From Kleiner, Symantec; Acquires ID Analytics". TechCrunch. Retrieved 30 May 2014.
  9. 1 2 Kara Swisher (10 September 2012). "In the Vault: Former Yahoo Exec Hilary Schneider Set to Join IPO-Bound LifeLock as President". All Things D. Retrieved 30 May 2014.
  10. ↑ Kevin Fitchard (12 December 2013). "LifeLock buys mobile wallet Lemon for $42.6M". Gigaom. Retrieved 30 May 2014.
  11. ↑ Seth Fiegerman (12 December 2013). "LifeLock Acquires Lemon App For $42 Million to Develop Digital Wallet". Mashable. Retrieved 30 May 2014.
  12. 1 2 3 Sarah Perez (12 December 2013). "LifeLock Acquires Mobile Wallet Platform Lemon For $42.6 Million, Launches LifeLock Wallet". TechCrunch. Retrieved 30 May 2014.
  13. ↑ Sean Patterson (20 May 2014). "LifeLock Wallet App Removed From Mobile Stores". WebProNews. Retrieved 30 May 2014.
  14. 1 2 Ilana Lowery (20 February 2014). "LifeLock CEO shares more than SSN in first 'Reporter's Notebook' event". Phoenix Business Journal. Retrieved 30 May 2014.
  15. ↑ http://money.cnn.com/2015/07/21/pf/lifelock-identity-theft-protection-ftc/index.html
  16. ↑ Molina, Brett. "Symantec to acquire LifeLock for $2.3B". USA Today (2016-11-21). Retrieved 2016-11-21.
  17. 1 2 "ID Analytics". VentureBeat. Retrieved 30 May 2014.
  18. ↑ David Lohr (23 April 2012). "Identity Theft: Faking Out The Dead". Huffington Post. Retrieved 30 May 2014.
  19. 1 2 Om Malik (23 April 2007). "Lifelock gets $6 million from Kleiner Perkins". Gigaom. Retrieved 30 May 2014.
  20. ↑ "Symantec Partners with LifeLock to Unite $40M in Funding". Search Concepts. 13 August 2009. Retrieved 30 May 2014.
  21. ↑ Adam Kress (23 January 2008). "LifeLock gains $25 million in third-round funding to support growth". Phoenix Business Journal. Retrieved 30 May 2014.
  22. ↑ Matt Marshall (5 August 2009). "Symantec helps pump $40M into identity theft protection company Lifelock". VentureBeat. Retrieved 30 May 2014.
  23. ↑ O'Grady, Patrick (2012-03-14). "LifeLock gets $100 million investment, purchases ID Analytics".
  24. ↑ "Lifelock expects to price IPO at $9.50-$11.50". MarketWatch. Retrieved 25 September 2012.
  25. ↑ "LifeLock Files Registration Statement for Proposed Initial Public Offering". Yahoo Finance. Retrieved 29 August 2012.
  26. ↑ "LifeLock or Trusted ID: Which Is Best?". Retrieved 30 May 2014.
  27. ↑ "LifeLock Plans". Protect Cells. Retrieved 30 May 2014.
  28. ↑ "Lifelock Ultimate Review". ID Protection Guide. Retrieved 30 May 2014.
  29. ↑ Polina Polishchuk (10 July 2013). "LifeLock Junior: Identity Protection for Your Kids". NextAdvisor. Retrieved 30 May 2014.
  30. 1 2 Zetter, Kim (2006-02-16). "LifeLock Helps Guard Your ID". Wired.
  31. ↑ LifeLock’s $1 Million Guarantee – Separating Fact From Fiction - NextAdvisor Daily
  32. ↑ Hansen, Kristena (2012-07-10). "LifeLock teams with First Victoria bank in Texas".
  33. ↑ "Analyst Day Presentation". Securities & Exchange Commission. Retrieved 30 May 2014.
  34. ↑ "Rush Limbaugh Sponsor LifeLock: Why We're Sticking With Rush". March 5, 2012. Retrieved 2012-03-23.
  35. ↑ "LifeLock Community". Retrieved 2012-08-27.
  36. ↑ "Championing Associate". National Organization of Victim Assistance. Retrieved 30 May 2014.
  37. ↑ "Mighty 'America's Mayor' now appearing in ID-protection ads". MSN. Retrieved 22 March 2013.
  38. ↑ Daniel Miller (27 February 2013). "'Identity Thief' is 'once-in-a-lifetime opportunity' for LifeLock". LA Times. Retrieved 30 May 2014.
  39. ↑ "2008 NASCAR Lifelock 400". IMDb Pro. Retrieved 30 May 2014.
  40. ↑ "Kansas Speedway announces Lifelock as title sponsor for the NASCAR Nextel Cup Series Race". Kansas Speedway. 12 September 2007. Retrieved 30 May 2014.
  41. ↑ Jerry Bonkowski (9 July 2009). "Falling short of the goal". ESPN Chicago. Retrieved 30 May 2014.
  42. ↑ "Mercury, LifeLock Break New Ground with Partnership". Phoenix Mercury. Retrieved 30 May 2014.
  43. ↑ "Mercury, LifeLock Break New Ground with Partnership". Retrieved 2012-08-03.
  44. ↑ "LifeLock AAdvantage". Retrieved 2012-07-30.
  45. ↑ "LifeLock". Retrieved 2012-08-22.
  46. ↑ AMy Corr (23 October 2013). "BIZ DEV: Lowe Campbell Ewald Named AOR For LifeLock". MediaPost. Retrieved 30 May 2014.
  47. ↑ Aaron Baar (28 January 2014). "LifeLock Offers Internet Peace-Of-Mind". Marketing Daily. Retrieved 30 May 2014.
  48. ↑ "Lowe Campbell Ewald Creates "Do Your Thing" Campaign For LifeLock". 27 January 2014. Retrieved 30 May 2014.
  49. ↑ "FBI Partners with LifeLock to Fight Identity Theft". Identity Theft Resource Center. 21 June 2013. Retrieved 30 May 2014.
  50. ↑ "LifeLock". FBI-LEEDA. Retrieved 30 May 2014.
  51. ↑ Dian Schaffhauser (14 February 2014). "PTA and LifeLock Developing Learning Kits To Teach Good Digital Habits". The Journal. Retrieved 30 May 2014.
  52. ↑ Rachel Drake (2 April 2014). "Vivint Partners with LifeLock to Offer Complete Home & Identity Protection". Safewise. Retrieved 30 May 2014.
  53. ↑ Casacchia, Chris (2007-06-12). "LifeLock founder resigns amid questions about his past". bizjournals.com. Retrieved 2007-06-19.
  54. 1 2 CEO’s Identity Stolen 13 Times
  55. ↑ LifeLock CEO said to be victim of identity theft 13 times (ComputerWorld, May 19, 2010)
  56. ↑ CEO Has Identity Stolen 13 Times, Raises Concern Over LifeLock's Legitimacy – TMCnet, 5/19/10
  57. 1 2 "Fraud-prevention pitchman becomes ID theft victim". Archived from the original on 2008-05-26. Retrieved 2008-05-22.
  58. ↑ "Experian Sues LifeLock For 'Abusing' Fraud Alert System". Archived from the original on May 28, 2008. Retrieved 2012-09-11.
  59. ↑ "LifeLock, Experian settle case over alerts". Retrieved 2009-10-23.
  60. ↑ Singel, Ryan (3 October 2012). "LifeLock's IPO Is Unimpressive, But Not as Bad as Its Checkered Past". Wired. Condé Nast Publications. Retrieved 7 October 2012.
  61. ↑ Federal Trade Commission, Plaintiff, v. LifeLock, Inc., a corporation; Robert J. Maynard, Jr., individually and as an officer of LifeLock, Inc.; and Richard Todd Davis, individually and as an officer of LifeLock, Inc., Defendants (March 8, 2010)
  62. ↑ LifeLock Will Pay $12 Million to Settle Charges by the FTC and 35 States That Identity Theft Prevention and Data Security Claims Were False (FTC news release, 03/09/2010)
  63. ↑ "LifeLock to Pay $100 Million to Consumers to Settle FTC Charges it Violated 2010 Order". 17 December 2015.
  64. ↑ Nichols, Shaun (17 December 2015). "LifeLock didn't live up to their hype, and now they're $100m lighter". The Register. Situation Publishing. Retrieved 18 December 2015.

External links

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