LifeLock, Inc. has agreed to one of the largest redress settlements of its kind to resolve the Federal Trade Commission’s (“FTC”) claims that it failed to comply with an earlier order regarding false advertising. Back in 2010, the FTC, along with 35 state attorneys general, filed a complaint against LifeLock, claiming it mislead consumers regarding their identity theft protection services. At that time, LifeLock agreed to a $12 million settlement, promised to stop making deceptive claims, and to strengthen its measures to safeguard the personal information collected from customers.
In July 2015, the FTC filed documents alleging LifeLock violated significant provisions of the 2010 settlement agreement by:
- failing to establish and maintain a comprehensive information security program to protect its customers’ sensitive personal information, including credit card, Social Security, and bank account numbers, from at least October 2012 through March 2014;
- falsely advertising during that period that it protected consumers’ sensitive data with the same high-level safeguards as financial institutions;
- falsely advertising that it would send alerts “as soon as” it received any indication that a consumer may be a victim of identity theft from January 2012 through December 2014; and,
- failing to meet the 2010 order’s recordkeeping requirements.
While LifeLock neither confirms nor denies allegations that they violated the 2010 order, they have agreed to the terms of the proposed settlement. Under the agreement, LifeLock will deposit $100 million into the registry of the U.S. District Court of Arizona. Up to $68 million of that amount may be used to settle an ongoing class action lawsuit related to the conduct alleged in the FTC filing. The company cannot use any of those funds to pay administrative costs or legal fees associated to the class action. The customers must receive the money. Any money not received by consumers in class action and other settlements between LifeLock and the state AGs will go to the FTC for further consumer redress.
Identity theft is such a common occurrence. We must all take steps to protect our information. For helpful tips, check out BCA’s guide on Identity Theft. If you are thinking of signing up for ID theft protection services, you will find a wide array of companies out there that promise to help you monitor your accounts. Evaluate all offers, the company’s promises, and reputation before signing up for services. And always: Before you pay, check BCA.
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About Business Consumer Alliance
Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.