LifeLock ID Protection Service Fined by FTC for Making False Claims Again

The United States Federal Trade Commission (FTC) has imposed another fine on LifeLock, the identity protection service company, for making false claims in its promotional materials. LifeLock settled a similar lawsuit brought by the FTC and the attorneys-general of 35 states in 2010. This settlement required the company to desist in making deceptive advertising claims, establish stronger measures to protection the personal data it collects from consumers, and pay customer refunds totaling $11 million. Now, in 2016, the FTC says that LifeLock has violated the original settlement order.

According to the federal agency, LifeLock did not establish and maintain a comprehensive program to protect the information security of consumers’ personal data, which includes bank account information, credit card numbers, and Social Security number. Additionally, the FTC claims that the firm has falsely advertised that it will send alerts “as soon as” any indications are received that a customer may be an identity theft victim. The company is misrepresenting the level of security it provides, says Ken Cuccinelli, Virginia Attorney General. “LifeLock had been falsely claiming to be an airtight guarantee against all forms of identity theft,” he said.

The FTC contends that the firm’s service is not effective in keeping customers safe from the abuse of their existing accounts or providing much protection against tax fraud, employment-related fraud, or medical fraud.

As a result of its violations of the 2010 settlement, LifeLock has been ordered to pay another $100 million.

Consumers should be aware of the limits of credit monitoring services: they are unlikely to stop identity thieves from opening new lines of credit using stolen personal information, but they can alert the customer that a thief has already obtained new credit in their name, however.