LifeLock Settles Lawsuit With The FTC For $12 Million

March 24, 2010

LifeLock Settles Lawsuit With The FTC For $12 Million

LifeLock, the company that was so certain of its ability to stop identity theft that the company’s chief executive shared his Social Security number as part of the service’s advertising, has agreed to pay out a $12 million settlement. The agreement to settle came from charges that LifeLock was deceptive in its claims to protect users from identity theft.

The Federal Trade Commission will receive the majority of the settlement, to the tune of $11 million while $1 million will be divvied among the state attorney generals from 35 states. This is one of the largest FTC-state settlements ever.

Customers of LifeLock are charged $10 per month for the service, which promises to help protect customers from identity theft. As a marketing gimmick, LifeLock has displayed the Social Security number of chief executive Todd Davis on the side of a truck in commercials.

The complaint against LifeLock took issue with the company’s claims that it could guarantee protection against identity theft. The complaint included LifeLock’s claim to be the first company protecting customers against identity theft.

The gist of the complaint from the FTC against LifeLock is the promises that the company made in regard to specific aspects of their identity theft protection. Disputed claims included LifeLock’s promise to prevent unauthorized changes to customer address information. Other LifeLock claims mentioned in the complaint were monitoring of credit reports and promised telephone calls from potential creditors before new accounts were opened in customers’ names.

The FTC also alleged that LifeLock made false statements regarding customers’ personal data. The FTC alleged that LifeLock collected customers’ Social Security numbers and credit card information.

Part of the settlement agreement stipulated that LifeLock will be unable to make such misrepresenting statements and deceptive claims. LifeLock will be required to put new data security procedures in place that will be assessed by a third party for the next 20 years. In addition, the company’s ability to state identity theft claims will be greatly limited.

Publisher: Salient News