LifeLock pays $11 million in settlement with FTC
The Federal Trade Commission received an $11 million payment from LifeLock as the two reached an agreement following a lawsuit by the FTC against the identity theft company. The FTC claimed that LifeLock misled the public with its advertising campaigns.
“While LifeLock promised consumers complete protection against all types of identity theft, in truth, the protection it actually provided left enough holes that you could drive a truck through it,” said FTC Chairman Jon Leibowitz.
Some of the claims to which the FTC took exception included:
• “By now you’ve heard about individuals whose identities have been stolen by identity thieves. LifeLock protects against this ever happening to you. Guaranteed.”
• Please know that we are the first company to prevent identity theft from ever occurring.”
• “Do you ever worry about identity theft? If so, it’s time you got to know LifeLock. We work to stop identity theft before it happens.”
The FTC said these claims were false and misleading. The most common form of identity theft is the misuse of existing bank and credit card accounts. The FTC argued that the fraud alert placed by LifeLock – which is the same was what other identity theft protection services offer, as well as what individuals can place themselves – did nothing to protect customers’ accounts.
Cases of identity theft where the criminal opens new accounts in the name of the victim accounted for just 17 percent of all identity cases, according to the FTC, and while having a fraud alert in place would help against this type of attack, it in no way guarantees protection.
The FTC further complained that LifeLock’s claims that it constantly monitors your credit file and that it would prevent unauthorized changes to your address information, and that you will always receive a phone call before any new line of credit is opened is false.
The FTC also felt that LifeLock’s claims that customer data is protected and access is only granted on a “need to know” basis, and that the data is encrypted.
The courts also ordered LifeLock to pay $1 million to a group of about 35 state attorneys general. The money will be used by the FTC to provide refunds to former LifeLock customers.
It has been reported that LifeLock CEO Todd Davis knew his identity had been stolen numerous times, but he continued to show his Social Security number to the public, claiming it was safe because LifeLock would protect him.
LifeLock has acknowledged that no one can prevent identity theft – but there are steps you can take to make your personal information useless to anyone but you. That’s what LifeLock has always done. That’s what it did for Davis. Each time his Social Security number was found to be compromised, the identity theft attempt was stopped before any damage could be done to Davis’ credit.
January 1st, 2011 at 8:54 am
As a victim of identity theft myself, there seems to be a ring of people in Grand Junction, CO that have stolen many identities!
March 2nd, 2011 at 9:33 am
If the FTC got all that money and it was supposed to be paid out to former LifeLock customers, where’s my cut?
March 10th, 2011 at 5:34 pm
I don’t know how these people can think they’ve got a lawsuit when LifeLock lays out its policies and everything up front. It’s not false or misleading when it’s right in front of your face.
March 23rd, 2011 at 12:35 pm
Some folks are pointing the finger at LifeLock regarding how they protect the data they get from people. I looked at their site, and it tells you how they protect it. It’s right there.
April 19th, 2011 at 6:12 pm
I have watched LifeLock with interest ever since the first time I saw Davis drive by in that truck with his Social Security number on it. I thought he was nuts. I still do. But I have to admit, it his credit’s still good, LifeLock must be doing something right.