Lifelock Scam Ends With $11 Million Payment To FTC
The Federal Trade Commission (FTC) will receive an $11 Million payment from Lifelock as the company are finally forced to own up to the false claims they made about their identity theft protection products.
The FTC agreed with us and most identity theft experts that Lifelock mislead 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.
As part of the settlement - one of the biggest ever - Lifelock are barred from making more deceptive claims about their product.
Some of the claims Lifelock made which the FTC took exception to 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 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 found all of the above false and misleading. The most common form of identity theft is the misuse of existing bank and credit card accounts. The FTC correctly argued that the fraud alert placed by Lifelock did absolutely nothing to protect these accounts.
Cases of identity theft where the criminal opens new accounts in the name of their victim accounted for just 17% of all identity theft cases according to the FTC and while having a fraud alert in place would help against this type of attack it in no way guaranteed you protection.
The FTC further complained that Lifelock’s claims that it ‘constantly monitors your credit file’ 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’ were all false.
Lifelock were also found woefully short in the claims they made about protecting their customers data. During the sales process Lifelock customers were told that:
- “Only authorized employees of LifeLock will have access to the data that you provide to us, and that access is granted only on a ‘need to know’ basis.”
- “All stored personal data is electronically encrypted.”
- “LifeLock uses highly secure physical, electronic, and managerial procedures to safeguard the confidentiality and security of the data you provide to us.”
All 3 statements were found to be false and misleading.
None of the data customers supplied (including social security and credit card details) was encrypted. The information was freely available to all staff members instead of a strict need to know basis and the software used by the company was found to be highly vulnerable to attack.
As well as the $11 million to the FTC Lifelock will also pay a further $1 Million to a group of 35 state attorneys general.
The FTC will use the $11 Million to refund customers. They are to send out letters to past and present customers who fell victim to the great Lifelock scam.
In addition to LifeLock being barred from misrepresenting the value of the Lifelock service the FTC also extended it to include co-founders Richard Todd Davis and Robert J. Maynard, Jr.
As reported on this site several times,Todd Davis knew full well his identity had been stolen over 20 times yet continued to show his social security number to the public claiming it was safe to do so because his company would protect his identity.
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The biggest heists in history have been inside jobs, perpetrated by the very people entrusted to protect those they have stolen from, scammed, extorted from, etc. I would like to cite the Congress of the United States of America as an outstanding example.