Tuesday, March 09, 2010

Lifelock Dinged $12 Million for Deceptive Business Practices

Kim Zetter writes on Threat Level:

The CEO of Lifelock, Todd Davis, became famous for advertising his Social Security number on television ads and billboards promising his $10 monthly service would protect consumers from identity theft.

The company also offered a $1 million guarantee to compensate customers for losses incurred if they became a victim of identity theft after signing up for the service.

But the Federal Trade Commission said Tuesday that the claims were bogus [.pdf] and accused Lifelock, based in Arizona, of operating a scam and con operation. The commission announced, along with 35 state attorneys general, that it had levied a fine of $12 million against the company for deceptive business practices and for failing to secure sensitive customer data. Of that amount, $11 million will go to refund customers who subscribed to the service. Consumers will receive a letter from the FTC and their attorney general explaining how to take part in the settlement.

The FTC said that Lifelock, which advertises itself as “#1 In Identity Theft Protection,” engaged in false advertising by promising customers that if they signed up with its service their personal information would become useless to thieves.

“In truth, the protection they provided left such a large hole … that you could drive that truck through it,” said FTC Chairman Jon Leibowitz, referring to a Lifelock TV ad showing a truck painted with the CEO’s Social Security number driving around city streets.

More here.


Post a Comment

<< Home