Identity: An Update on LifeLock

UPDATED – The LifeLock FTC Settlement

LifeLock settled a lawsuit with the Federal Trade Commission. Here is our position on these events.


The Controversy About Robert Maynard, a Founder of LifeLock, Inc.

Update: We have just learned that LIfeLock co-founder Robert Maynard has resigned.
Here is the original story:


As you likely know, we have been strong supporters of LifeLock as the first solution to identity theft that we felt comfortable personally using and promoting to our friends, families, and subscribers. Until now, we have personally used their service and wholeheartedly recommended LifeLock as a strategic partner.

As you also know, we care passionately about you — our subscribers and website visitors — and are committed to always providing you with the best information and advice we possibly can.

Last Thursday, a troubling article was published about LifeLock founder Robert Maynard in the Phoenix New Times. This article was certainly not objective, but it raised serious questions about Robert’s background and whether or not he was, in fact, truly a victim of identity theft.

Audri had interviewed Robert about his identity theft experience and we published the interview on May 16, 2007, as ScamBusters issue #231. The author of the Phoenix New Times article mentioned our interview as an example of how Internet sites and media “fell for” Robert Maynard’s story.

LifeLock is endorsed by many reputable organizations and has received funding from two top venture capital companies, Kleiner Perkins Caufield & Byers and Bessemer Venture Partners. Until last week, there was nothing we knew of to indicate that LifeLock and its founders were not 100% reputable.

We should point out that we have found nothing that indicates any problem with LifeLock’s services. All of the potential questions relate to one of its founders, Robert Maynard.

For those subscribers and visitors who want a summary of what we plan to do up front: we personally plan to continue using LifeLock’s services.

In this article, we will present:

  1. The Phoenix New Times article that led to the questions
  2. The steps we took in response
  3. What we have found out
  4. What we plan to do.

The Phoenix New Times article that led to the questions

The article is called “What Happened in Vegas…” by Ray Stern, and was published in the Phoenix New Times on May 31, 2007. You can find it here:

http://www.phoenixnewtimes.com/2007-05-31/news/what-happened-in-vegas/

The steps we took in response

We decided we wanted to try to find out the validity of Ray Stern’s allegations. On May 31, we asked one of our ScamBusters, Carole (who is a reporter), to spend several hours trying to find out what she could about the accuracy of this story.

At the same time, Audri emailed Mike Prusinski at LifeLock asking for LifeLock to respond to the three key questions in the Phoenix New Times article:

1. Was Robert Maynard an identity theft victim and was his arrest truly because of the actions of someone who stole his identity?

2. Did Robert Maynard use his father’s identity to get a credit card without his father’s permission and authorization and then run up charges?

3. Was Robert permanently banned from the credit repair field?

At the end of Thursday, Carole verbally presented her findings to Audri. The issues were sufficiently complicated and Audri asked Carole to write up her notes. Carole did this on Friday.

LifeLock was very cooperative. Robert personally answered our three questions Thursday night with permission for us to publicly post the answers.

Robert’s response is as follows:

~~~ Begin Robert Maynard response ~~~

1. Was Robert Maynard an identity theft victim and was his arrest truly
because of the actions of someone who stole his identity?

Mr. Maynard:

Yes. To the very best of my knowledge I had absolutely no knowledge of
this debt. However, I voluntarily chose to pay it immediately because it
was not a huge sum of money and it could have had a profound personal
affect [sic] on my divorce.

2. Did Robert Maynard use his father’s identity to get a credit card
without his father’s permission and authorization and then run up
charges?

Mr. Maynard:

Absolutely not. My father and I have a bafflingly complex relationship.
I’m now seeking a copy of this application and if I need to, I will file
suit to get it. I no more stole his identity than he stole mine. He
and I co-signed a business account. He and I both approved the account.
When I got sick, I couldn’t pay it; he apparently didn’t want to take
any responsibility. However, he settled with American Express and did
not allege any unauthorized billing. This is just emotional opportunism
and as a father, I don’t know how even an estranged father could act
this way.

3. Was Robert permanently banned from the credit repair field?

Mr. Maynard:

Quite simply, yes. Some unsavory people started entering the field
around this time and the FTC was specifically prosecuting a man named
Hal Lederman. So, they filed a blanket lawsuit including anyone and
everyone with whom they could possibly have an issue: in sum, I had one
short deposition and was immediately offered a settlement that found no
fault and asked for no costs or fees. Hal Lederman, on the other hand,
was fined $27 million.

~~~ End Robert Maynard response ~~~

Robert also gave Audri his phone number and said she could call with more questions.

ScamBusters took down the interview with Robert Maynard on Friday and replaced it with a page saying:

“Identity: This page has been removed. There has been controversy about this story, and we have removed this page while we investigate the accuracy of the story.”

For personal reasons, we were unable to pursue this matter over the weekend.

We then prepared a draft of this page that we sent to LifeLock for comments and with the offer to publish their response as part of this page.

We also removed all LifeLock links and promotions from the ScamBusters website in the interim.

What we have found out

The approach we took to checking out this story was to try to confirm whether or not the sources did say what Ray Stern says they said. If so, a question that remains is – does Robert Maynard have alternative explanations for these facts?

Carole spoke with: Ray Stern, Bernie Zadrowski with the Clark County District Attorney’s office, Jase Steinberg – Robert Maynard Sr.’s lawyer, and Deb Lucas with the federal court.

We’ll cover each of the three primary questions:

1. Was Robert Maynard an identity theft victim and was his arrest truly
because of the actions of someone who stole his identity?

Carole spoke with Bernie Zadrowski, Deputy District Attorney and head of the check fraud division in Clark County Nevada. He confirmed the Phoenix New Times story correctly reflected the things he said. In fact he called Stern’s coverage of his interview as “deadly accurate.”

Zadrowski said: “At no time did anyone state they were a victim of identity theft. It’s not what happened.”

Further, Zadrowski said the person who took out the casino marker was Maynard. “Casinos have multi-billion-dollar-a-year businesses. They are experts in extending credit to the point where you can’t bust their procedures. (For a marker the size of Maynard’s) they take identification (i.e. a driver’s license) and have you fill out a casino credit application. Maynard would have had to present his driver’s license at the cage and filled out the application. The picture in the driver’s license is him. We ran the driver’s license, so we know it was a valid driver’s license. No claim was made of a stolen driver’s license. Arizona licenses are very tough to forge. The area under the signature is not a watermark that’s been laminated over, the watermark is built into the plastic.”

We also received a copy of the driver’s license.

We request LifeLock’s response to this.

2. Did Robert Maynard use his father’s identity to get a credit card without his father’s permission and authorization and then run up charges?

Carole summarized: “Arizona Superior Court shows a court record in which Robert Maynard Sr. was sued by American Express for credit card debt (same Internet address as above). The online record shows a settlement amount and that the case was dismissed.”

Dr. Robert J. Maynard, Sr.’s lawyer, Jase Steinberg, asked Carole to use the case to verify details, but did say the public record would show their position in that case was Maynard Sr. did not authorize the use of the credit card and that the credit card had been issued to his son.

As was mentioned above, Robert J. Maynard, Jr. wrote: “Absolutely not. My father and I have a bafflingly complex relationship. I’m now seeking a copy of this application and if I need to, I will file suit to get it. I no more stole his identity than he stole mine. He and I co-signed a business account. He and I both approved the account.”

This is a factual question that can be answered by viewing the appropriate documents. As this time, we have not been able to confirm the veracity of either account.

3. Was Robert Maynard permanently banned from the credit repair field?

Robert has answered this affirmatively, and says that there are other considerations.

Prior to hearing his response, Carole confirmed that the lawsuits that Ray Stern’s article reference on this do exist.

She wrote: “Federal court in Maricopa County (Phoenix) has a case on file against Robert Maynard, #CV96-2374. This would be where the FTC would have sued Maynard for producing a misleading infomercial about National Credit Foundation’s services. It would also have the injunction barring Maynard from the identity repair industry.

“We would need to order a copy of the court record at 50 cents a page to confirm the details. But the clerk of the court did confirm a consent judgment was rendered in the case and that a permanent injunction was also part of the record.

“Arizona Superior Court (state court), which keeps court records online, shows a judgment was won against Maynard for $5000 when the Arizona attorney general sued him over National Credit Foundation (CV1993-000642).”

We should point out that we have found nothing that indicates any problem with LifeLock’s services. All of the potential questions relate to one of its founders, Robert Maynard.

As we mentioned, on Monday evening, we sent a copy of the first draft of this page to LifeLock and requested their comments. We received two responses from Robert, one overnight and then one with more details on Tuesday morning. We have posted both of his responses below with his permission.

~~~ Begin Robert Maynard Response #1 on Monday Night ~~~

Audri -

I understand your position. And I appreciate the head’s up. Thanks for not canceling your service.

Hopefully, time will show what is really true here.

rm

~~~ End Robert Maynard Response #1 on Monday Night ~~~

~~~ Begin Robert Maynard Response #2 on Tuesday Morning ~~~

Audri -

I want to add a couple of items to my response last night:

I do not believe that you swallowed the Phoenix New Times article hook line and sinker. I believe that you did your best to find out the facts as you understand them. I am very, very sorry that your name came up in the article.

First, I understand the issue in Nevada looks bad, but I did not do it. I don’t know how to say it more clearly. I was never convicted of anything. Prosecutors don’t file cases and then say “maybe we were wrong.”

Second, I was completely blindsided by my father’s insinuation. No one had ever spoken to me of this issue. His lawyer says: “he didn’t authorize the charges,” not, “he didn’t authorize the account.” Lawyers are very precise in their use of words, Audri, and this artifice was his attempt to renege on his obligations as a co-borrower.

Until I can show you the application with both signatures for the American Express issue, I can only offer you logic. When I filed bankruptcy in 2005, I listed this debt on the filing. If I had actually stolen my father’s identity to get this account, I would have been admitting to a felony in a public record.

In 1993 I made a mistake about who I chose to go into business with. And, indeed, the entire business itself. This was fourteen years ago. I was deposed by the FTC for one two-hour session and I was offered a settlement finding no fault and asking for no fines, fees or costs (which is highly unusual). I had no intention of ever being in the credit repair business, so agreeing not to be in that business was not a problem for me. The man I made the mistake of choosing as a partner was fined $27 million.

Since then, I have built a public company, provided the initial funding for i-safe, the leading foundation in the country dedicated to keeping kids safe on the Internet, written a book about keeping kids safe (Goodparents.com), built software that has caught pedophiles, trained law enforcement how to track and prosecute pedophiles and survived a life-threatening illness and a diagnosis of permanent disability, coming back to build LifeLock.

All I can do is show you results. As Todd said, we have the most sophisticated investors on the planet behind our company. They have investigated my background more thoroughly than any reporter, yet they chose to invest in Todd and me. There is no doubt that a venture investment is fundamentally based on the founders. If you speak to the people who actually know me and have worked beside me for years, you will learn that my integrity is unquestioned.

I am a true entrepreneur, Audri. It comes with ups and downs. Walt Disney (and I am no Walt Disney) went bankrupt six times. It is the nature of entrepreneurs. We go up and we go down. However, we are the engine of the economy. Every business in existence was started by an entrepreneur. One of my favorite quotes is from Winston Churchill. He said “the only way to have a good idea is to have a lot of ideas.”

With that said, I understand that I am controversial. I truly appreciate the balanced and thoughtful nature of your response and I fully understand your position. In fact, if I were you with the same information, I would have probably made the same conclusion. I wish you nothing but the best and I am truly sorry if you feel that I have somehow misled you.

Best Personal Regards,

rm

~~~ End Robert Maynard Response #2 on Tuesday Morning ~~~

Conclusions: What we plan to do

We personally plan to continue to use LifeLock for ourselves. At this time, there is no indication whatsoever that there is any problem with the LifeLock service.

We are, however, concerned about the issues raised in the Phoenix New Times article. Our inquiry supported some of the points raised in the article. The issues are complicated, and there are still MANY outstanding questions that we do not know the answers to.

We do believe the LifeLock service is based on trust and integrity. LifeLock does not sell a product that is inert, that we can purchase, take home and think nothing about the individuals who may have built it. LifeLock sells a service — it is in the business of assuring individuals that their identities will be protected.

For us to recommend LifeLock, the credibility of its principals must be beyond reproach. With regard to co-founder Robert Maynard, Jr., we feel there are serious questions about his credibility. Therefore, we plan to reserve judgment and will withhold any recommendations until all of the facts are sorted out. So, in the interim, we have removed all LifeLock links from the ScamBusters site.

For the present, we also refrain from recommending whether or not current subscribers should keep or cancel their LifeLock subscriptions. We are simply informing people what we have found out at this time and what we personally plan to do.

As we mentioned, we personally plan to continue to use LifeLock for ourselves since, at this time, there is no indication whatsoever that there is any problem with the LifeLock service.

Finally, we really believe people need to be proactive about identity theft, and hope that subscribers will continue to be vigilant. We are saddened by these events because we continue to believe that the services offered by LifeLock are very worthwhile.