Texas Man Successfully Uses LifeLock CEO's Identity to Get $500

From the annals of "I could have seen that coming" come reports that LifeLock CEO Todd Davis' widely publicized Social Security number has been successfully used by a man in Texas to trick an online payday lender into giving him $500. Davis learned about the fraud when the lender called him to collect.

This was not the first time people have tried to steal Davis' identity. According to a story today on Yahoo news, Davis reported that at least 87 unsuccessful attempts have been made. Of course, Davis pretty much asked for it by plastering his Social Security number on billboards, television ads and in print, practically daring would-be identity thieves and hackers to test his company's ability to prevent identity fraud.

LifeLock, already facing a lawsuit by credit bureau giant Experian, is now facing lawsuits from consumers in Maryland, West Virginia and New Jersey contending that the service did not work as promised. The lead attorney in these cases, David Paris, is trying to obtain class-action status, and claims he uncovered records of other people applying for or receiving driver's licenses at least 20 times using Davis' Social Security number.

Davis stands by his stunt. He told reporters, "There's nothing on my actual credit report about uncollected funds, no outstanding tickets or warrants or anything… There's nothing to indicate my identity has been successfully compromised other than the one instance. I know I'm taking a slightly higher risk. But I'll take my risk for the tremendous benefit we're bringing to society and to consumers."

LifeLock's services include helping consumers set up fraud alerts with the major credit bureaus, which inform them when someone tries to tap into their credit. The fraud in Texas occurred because the payday lender did not go through one of the three major credit bureaus before approving the transaction.

The services, however, can't completely immunize a consumer from identity theft. If a stolen Social Security number is used on a job application, on a form submitted for medical services or during an arrest, the lack of reporting requirements make it impossible for any company to know with certainty that someone's identity has been compromised.

That's not the end of LifeLock's headaches, however. The company is also being sued in Arizona over its $1 million service guarantee. The plaintiffs in the case claim that the guarantee is misleading because it only covers a defect in LifeLock's service.

The question that remains unanswered: when will tighter mechanisms be put in place to deter and report fraud?