ID Theft Pioneer Rebuilding After $100M Contempt Settlement

LifeLock Inc., an identity theft protection company that settled federal court order contempt charges for $100 million in December, has ramped up internet advertising, TV ad campaigns and direct mail programs to try rebuilding its service and attract new consumers. 

The settlement was the largest monetary award ever secured by the Federal Trade Commission. The payment resolved charges that LifeLock violated terms of a 2010 federal court order requiring the company to secure consumers’ personal information. It also prohibited the company from deceptive advertising.

In a conference call about first quarter earnings, LifeLock CEO Hillary Schneider said the company started an internal reboot camp this year to examine lessons from their FTC experience.

"Our goal is to continuously reaffirm our commitment to standards that are well above what may be required by regulators or compliance obligations,” she said. "Since then we continue to roll out this program to all employees, asking each of them to actively participate in multiple classes between now and year’s end.”

The company, meanwhile, offered full year 2016 guidance that states total revenue is expected to be in the range of $662 million to $670 million, indicating that the identity theft pioneer may slowly recover. 

Chris Power, LifeLock’s CFO, speaking on the Q1 call, said, "We started the year with another solid quarter across our key metrics. Q1 total revenue was $159.3 million, above our guidance of $156 million to $158 million and up 18% compared to the first quarter of 2015. Our consumer business continued to post strong results, growing 19% year over year to $151.9 million. We added 345,000 gross new members in the quarter compared to 421,000 in the first quarter of last year."

Company officials also said that all of its employees are being trained related to lessons from the FTC settlement.

In January, the company hired Mike Dean - former group president of Experian’s Consumer Direct division - as its chief strategy officer. Schneider credited him with adding strength to the company’s sales leadership team and said he is realigning the firm’s go-to-market strategy to rank the opportunities of most value for LifeLock going forward.

Schneider also pointed to a couple of big Q1 victories, including securing a top five credit card issuer to implement LifeLock’s ID Score on all of their credit applications. Further, one of the nation’s top three automotive lenders implemented a LifeLock solution for all of its auto loan originations.