LifeLock settles with FTC over ID theft product claims

Posted: March 15, 2010 in corporate voyeurism, lawsuits, LifeLock, privatized identity, products

LifeLock settles with FTC over ID theft product claims

LifeLock will pay $11 million to the Federal Trade Commission (FTC) and $1 million to a group of 35 state attorneys general to settle charges that the Tempe, Ariz.-based company made false claims about its identity theft products.

The FTC contended that LifeLock’s claims were “deceptive” because the fraud alerts it places on customers’ credit files can only protect against certain types of identity theft, such as new account fraud, which occurs when an ID thief opens up new financial accounts by using the victim’s name and Social Security number.

However, the FTC’s complaint alleged that LifeLock’s services do not prevent against the “misuse of existing accounts,” nor do they prevent medical or employment ID theft.

Under the agreement, announced this week, LifeLock is prohibited “from making deceptive claims and required to take more stringent measures to safeguard the personal information they collect from customers,” according to an FTC news release.

“This agreement effectively prevents LifeLock from misrepresenting that its services offer absolute prevention against identity theft because there is unfortunately no foolproof way to avoid ID theft,” Illinois Attorney General Lisa Madigan said in the statement. “Consumers can take definitive steps to minimize the chances of having their personal information stolen, and this settlement will help them make more informed decisions about whether to enroll in ID theft protection services.” :::MORE HERE:::

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