ID Theft “Prevention” Company Settles False Advertising Case
Arizona-based LifeLock to pay $11 million to customers
March 10, 2010
LifeLock Inc., an Arizona company that had promised consumers it could protect them from identity theft, has agreed to pay $12 million to settle false advertising claims brought by the Federal Trade Commission and 35 state attorneys general.
The FTC has announced that the company will pay $11 million in restitution to customers and $1 million in reimbursement to the states for their investigation.
Since 2006, Lifelock has been known for advertisements featuring the Social Security number of its president, Todd Davis – ads intended to demonstrate the company’s confidence in its services.
The FTC alleged that LifeLock’s ads “have claimed that it could prevent identity theft for consumers willing to sign up for its $10-a-month service.” But, according to the agency, “the fraud alerts that LifeLock placed on customers’ credit files protected only against certain forms of identity theft and gave them no protection against the misuse of existing accounts, the most common type of identity theft.” The fraud alerts allegedly offered no protection against forms of identity theft in which thieves use personal information to get medical care or apply for jobs.
“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,” FTC Chairman Jon Leibowitz said in the agency’s news release.
Going forward, LifeLock “and its principals will be barred from making deceptive claims and required to take more stringent measures to safeguard the personal information they collect from customers,” the FTC stated.
The FTC added that it will be sending letters to current and former customers of LifeLock who may be eligible for refunds. For more information, call 202-326-3757, or visit www.ftc.gov/lifelock.
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