“[E]nough holes that you could drive a truck through it…..”
That’s how Federal Trade Commission Chairman Jon Leibowitz described the identity theft protection offered to consumers by the widely-advertised LifeLock product and the claims made by the company that its service provided comprehensive identity theft protection. Those claims have cost the company $12 million dollars in a settlement announced today by the FTC chairman and Illinois Attorney General Lisa Madigan. According to the lawsuit, LifeLock claimed its service would protect consumers against all forms of identity theft, when, in fact, LifeLock offered only limited protection against only some forms of identity theft and had no effect on the most common form: the misuse of existing credit card and bank accounts.
The settlement was announced at a press conference today and LifeLock has agreed to pay $11 million to the FTC and $1 million to a group of 25 state attorneys general to settle the deceptive advertising charges. In addition to the $12 million settlement, LifeLock and its co-founders Richard Todd Davis and Robert J. Maynard, Jr. are prohibited from making deceptive claims and required to better safeguard customers’ personal information.
The FTC will use the $11 million it receives from the settlements to provide refunds to consumers. It will be sending letters to the current and former customers of LifeLock who may be eligible for refunds under the settlement, along with instructions for applying.
Complaint - Federal Trade Commission, Plaintiff, v. LifeLock, Inc., a corporation; Robert J. Maynard, Jr., individually and as an officer of LifeLock, Inc.; and Richard Todd Davis, individually and as an officer of LifeLock, Inc., Defendants
Press Release - Information on Lifelock Settlement