Former LifeLock Executive Files Whistleblower Lawsuit

Date Published:

A former chief information security officer is blowing the whistle on LifeLock, alleging that the company fired him for speaking up when he found out that it turned off or reduced notifications to elderly customers to lower the number of calls to its customer support center. Michael Peters filed the lawsuit in Federal Court against Kim Jones, the chief information security officer for his former employer, Cristy Schaan, the current chief information security officer for LifeLock and LifeLock.

LifeLock sells identity theft protection. According to Courthouse News, it has been sued more than 80 times in recent years. Among these 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. LifeLock deceived its customers into thinking they were getting services that they were not, according to the FTC settlement statement.

Peters alleges in his whistleblower case that there were “many instances of illegal and incompetent practices that constituted fraud against LifeLock’s shareholders”, which he discovered while starting an initial risk assessment. In his lawsuit he says he discovered that “LifeLock would turn off or reduce the services alerting elderly customers to reduce the call volume received by LifeLock’s customer support center,” He alleges that this is fraudulent 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.”

He also found that the company 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”.
According to Peters, he met separately with LifeLock’s chief financial officer Chris Power and chief information officer Rich Stebbins to disclose his findings and was fired. He alleges that the company directed its in-house special counsel for labor and employment to find a reason to fire him.
Peters’ allegations are similar to what customers are 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. When she applied for a loan, she thought that this would immediately trigger an alert, but she wasn’t 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. Other users say they get even less than that. Jeffrey, a consumer In Tennessee, said to Consumer Affairs last July “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.”