Whoops. My bad.

LifeLock promises to “take control” of your identity — they just don’t tell you who gets to take control. Patrick and I chatted a while back about Todd Davis, the CEO of LifeLock, and how his ads promoting the ability of his company to protect identity, actually helped with the theft of his own. Back in 2007, a gentleman in Texas had used Davis’ identity to obtain a $500.00 without Davis’ knowledge. In fact, Davis only had learned about it after the unpaid loan was sold to a debt collection agency — but that’s old news.

Today, thanks to the Phoenix News Times, we learn that Davis had his identity stolen a grand total of 13 times. Or, at least 13 times that we know of.

With attention grabbing ads that published Davis’ Social Security Number, LifeLock caught the attention of many customers; as well as the FTC — who accused the company of running a scam operation and fined them $12 million dollars.

Additional Reading

• Cracking LifeLock: Even After a $12 Million Penalty for Deceptive Advertising, the Tempe Company Can’t Be Honest About Its Identity-Theft-Protection Service (Phoenix New Times)
• Lifelock Dinged $12 Million for Deceptive Business Practices (wired.com)

This week we discuss such great things as FEMA security, FTC rules, and loss of liberties at airports.

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Well, perhaps stop is too strong of a word. We should have stated instead that the FTC recently added more regulation in an attempt to severely limit prerecorded calls. But, that just doesn’t have the same BAM, in your face attention grabbing feel as “FTC Stops Prerecorded Calls.” Anyway, where were we? Oh yeah…

The FTC (Federal Trade Commission), established initially to “bust the trusts” and stamp out unfair competition, evolved into a modern day version of “We’re from the government. We’re here to help.” With a tag-line of “Protecting America’s Consumers” today’s FTC investigates advertising claims, marketing practices, marketplace competition, and well, generally looks at anything dealing under the commerce umbrella. With the creation of federal “Do Not Call” lists, the FTC established itself as the main enforcer of telemarketers; quickly creating many regulations and rules governing the practice of phone solicitation.

Interestingly, consumers do not receive individualized complaint protection. The FTC specifically does not resolve individual consumer complaints. Instead, the FTC collects complaints about companies, business practices, etc. and investigations result from the numerous complaints received.

Prerecorded Calls

First, let’s discuss prerecorded calls. Prerecorded calls occur when a caller receives a prerecorded message rather than talking to a live person. Examples could be something along the lines of “Hello Patrick and Fred. Because you are such amazing customers, I have a very special offer for you to save big big money. If you want to save big big money press one now. If you don’t want to save big big money hang up.”

From complaints received, the FTC rendered an opinion stating that consumers, who already do not like receiving unsolicited telephone calls, dislike prerecorded calls even more. We truly hope that the FTC and NASA hire from very different applicant pools. Anyway, the rocket scientists at the FTC used more than 13,000 complaints and comments during a “proposal” period to create the following rules:

• Prerecorded sales calls are prohibited unless explicit permission has been obtained
• Permission for prerecorded sales calls can be obtained electronically
• When permission is obtained, calls must have an opt-out mechanism
• Healthcare messages are exempt
• Charitable calls are exempt, however, must provide an opt-out mechanism
• Prerecorded calls must ring for 15 seconds before treating the call as unanswered
• Prerecorded messages must start within 2 seconds of answering
• Prerecorded calls must disclose that the recipient can be placed on the do not call list at anytime during the message
• 97% of all calls where a person requests to speak to a live person must be answered by an actual live person within 2 seconds

And when do these regulations go into effect? September 2009.