A former executive has filed a whistleblower lawsuit against LifeLock, a company who sells identity theft protection. Michael Peters, former chief information security officer at LifeLock, is suing Kim Jones, the chief information security officer for his former employer, Cristy Schaan, the current chief information security officer for LifeLock and LifeLock in Federal Court. Peters alleges that LifeLock reduces its alerts to the elderly in order to minimize the number of calls to its customer support center. When he spoke up about the issues, Peters says, LifeLock fired him.
During an initial risk assessment, Peters says he found “many instances of illegal and incompetent practices that constituted fraud against LifeLock’s shareholders”. He alleges that “LifeLock would turn off or reduce the services alerting elderly customers to reduce the call volume received by LifeLock’s customer support center,” This is fraudulent, Peters says, because the company “sold its services to the general public without any disclosure that alert services would be limited for certain segments of the population.” Peters also discovered that LifeLock was in the process of finalizing a new product called PassLock, which “would be identified by most service providers as intrusive, illegal, illegitimate, and then blacklist the source address”.
Peters met chief financial officer Chris Power and chief information officer Rich Stebbins to discuss his findings. He alleges that he was fired because of it. The company allegedly directed its in-house special counsel for labor and employment to find grounds to fire him.
Courthouse News reports that LifeLock has been sued 80 times in recent years. One of the cases is a securities fraud class action lawsuit filed on behalf of shareholders who allege that the company did not comply with an order from the Federal Trade Commission in 2010. According to the FTC settlement statement, LifeLock deceived its customers into thinking they were getting services that they were not.
The allegations in the whistleblower lawsuit are similar to what customers have been saying on Consumer Affairs. Brenda, a consumer in California, said she noticed she wasn’t getting as many notifications as she expected starting last August. She thought she would get an alert, for instance, when she applied for a loan. However, she was not notified until the next day. “I thought they would alert you right away the same day that your credit was being pulled and put a stop to it until they get a response back.” she said to Consumer Affairs. Jeffrey, a consumer In Tennessee, said to Consumer Affairs last July that he got even less than that: “We got Lifelock three months ago, thought we might need it. So we called and they told us all the good things that they do …. [they said] anytime we applied for any kind of credit, within 5 minutes we would be texted to see if it was us or someone trying to use our credit. In the last 3 months we have opened up a credit account and have been using it. They haven’t texted or called us to let us know. This week we bought a $10,000 ATV and there have been no texts to our phone or no emails. That could have been anyone doing that. We canceled our membership today.”