LifeLock pays $100M to settle FTC complaint of more false advertising

Identity protection vendor violated 2010 court order, regulators alleged

FTC website
Credit: Gil C / Shutterstock.com

The U.S. Federal Trade Commission (FTC) yesterday announced that the anti-identity-theft company LifeLock will pay a record $100 million to settle a contempt complaint that originated with a court order of five years ago.

Arizona-based LifeLock, which purports to protect consumers from identity theft -- and help them regain it if stolen -- was once best known for its aggressive advertising, which splashed its CEO's Social Security number everywhere and dared hackers to steal his identity.

In 2010, the company settled with the FTC and nearly three-dozen states attorney generals over fraudulent advertising charges, paying $12 million in the process. Much of that money was returned to consumers.

But in July, the FTC filed a new lawsuit, alleging that LifeLock had not complied with the 2010 order and settlement, citing continued false advertising and charging that it had not beefed up its security to protect customers' personal information.

Although LifeLock said in July that it would go to court to fight the new allegations, it ultimately settled. The $100 million LifeLock is to pay will be held by an Arizona federal court and dispensed to consumers participating in a national class action lawsuit.

"This settlement demonstrates the Commission's commitment to enforcing the orders it has in place against companies, including orders requiring reasonable security for consumer data," said Edith Ramirez, the chair of the FTC, in a statement Friday.

In addition to the $100 million payment, the settlement extends LifeLock's record-keeping requirements, which were an important part of the 2010 agreement, until 2023.

In a statement of its own, LifeLock pointed out in legal boilerplate that "As a part of the settlement, LifeLock neither confirms nor denies the allegations of the parties."

The company also claimed that the charges were related to "advertisements that we no longer run and policies that are no longer in place." That meant, LifeLock boasted, that "the settlement does not require us to change any of our current products or practices."

LifeLock charges consumers between $10 and $30 monthly -- or between $110 and $330 annually -- for its services, depending on the service plan.

In its most recently-reported quarter, LifeLock booked revenue of $152 million, a 64% increase over the same period of the year prior.

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