The Federal Trade Commission and a consortium of state attorneys general have reached a $12 million agreement with an identity theft protection service provider to settle charges that the company used false claims in its advertising. The FTC also charged that its service provided no protection against certain forms of identity theft, including medical identity theft, the federal watchdog agency has announced.
LifeLock has agreed to pay the FTC $11 million as part of the settlement deal and pay $1 million to a group of 35 attorneys general; in addition, the company will be barred from making deceptive claims; and it will be required to take more stringent measures to secure customer information, according to an FTC news release. The payment to the FTC will be distributed among LifeLock customers.
“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 release.
According to the release, in marketing its $10 a month service, LifeLock made promotional claims such as the following: “By now you've heard about individuals whose identities have been stolen by identity thieves … LifeLock protects against this ever happening to you. Guaranteed.”
But the forms of protection LifeLock employed as part of its service—placing fraud alerts 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 FTC release said, adding, “It also allegedly provided no protection against medical identity theft or employment identity theft, in which thieves use personal information to get medical care or apply for jobs.”