Identity Theft Protection Provider Agrees to $11 Million for Consumers
BALTIMORE (March 10, 2010) - Attorney General Douglas F. Gansler announced Tuesday that his Consumer Protection Division, along with consumer protection agencies from 34 other states and the Federal Trade Commission, has reached a settlement with LifeLock, Inc., a Tempe, Arizona-based identity theft protection provider, concerning the company’s advertising practices.
LifeLock sold its identity theft services through advertisements that claimed its services were “guaranteed” to protect consumers’ personal information and prevent criminals from using that information to open accounts in their names. Some ads even included CEO Todd Davis’ Social Security number, which Davis said, showed “how confident I am in LifeLock’s proactive identity theft protection.” The Attorney General alleges that LifeLock made a range of deceptive claims in its advertisements that misled consumers to believe its services were a “proven solution” that would protect against all forms of identity theft, including criminal, mortgage and child identity theft.
In a Complaint filed by the Attorney General in the Circuit Court for Baltimore City, the company was accused of exaggerating the protection it provided, falsely representing to consumers that it would reimburse them up to $1 million for their losses if their identities were stolen while they were LifeLock subscribers, and misrepresenting the nature of the services it provided to protect or alert consumers when their personal information had been compromised.
Under the settlement reached with the states and the FTC, LifeLock is prohibited from misrepresenting that its services:
-- Protect against all types of identity theft;
-- Constantly monitor activity on each of its customers’ consumer reports;
-- Always prompt a call from a potential creditor before a new credit account is opened in the customer’s name; and,
-- Eliminate the risk of identity theft.
LifeLock is also prohibited from overstating the risk of identity theft to consumers, including whether a particular consumer has become or is likely to become a victim. Past marketing materials have warned consumers about their heightened risk of identity theft when LifeLock did not have information to warrant such a warning.
“Identity theft is a growing threat to consumers,” said Attorney General Gansler. “Consumers who purchase services to protect their identities need to be told all of the facts so that they will not be misled concerning the scope of the protections that are being offered.”
LifeLock agreed to pay $11 million in restitution to consumers. The FTC and states will jointly send letters to eligible consumers, notifying them of the agreement and how they can opt-in to the settlement. LifeLock also agreed to pay $1 million to cover the costs of the states’ investigation. In addition to Maryland, the states that settled with LifeLock were Alaska, Arizona, California, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Massachusetts, Michigan, Missouri, Mississippi, Montana, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington and West Virginia.
Consumers who believe they have been the victims of identity theft may contact the Attorney General’s Identity Theft Unit by calling (410) 576-6491 or visiting the Attorney General’s Web site at: http://www.oag.state.md.us/ .
Source: Office of Attorney General Douglas F. Gansler