JACKSON – Mississippi Attorney General Jim Hood joined the U.S. Federal Trade Commission (FTC) and 34 additional states in announcing an agreement reached with LifeLock, Inc., a Tempe, Ariz., based identity theft protection provider, that resolved an investigation into the company’s misleading advertising practices.
LifeLock has agreed to pay $11 million in restitution to consumers as part of that resolution.
LifeLock sells identity theft services which past advertisements claimed were guaranteed to protect consumers personal information and prevent criminals from using it 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,” he said.
Printed news reports indicated that Davis had in fact, been the target of identity theft – despite his LifeLock protection – and individuals had reportedly used his social security number to apply for bank loans and possibly driver’s licenses.
Attorney General Hood said LifeLock’s advertisements also implied that individuals with fraud alerts on their consumer reports will always receive a phone call prior to the opening of new accounts, when in fact, a phone call is not required by federal law.
The FTC and the 34 states began jointly investigating LifeLock amid allegations that the company made a range of deceptive claims 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.
The settlement also resolved allegations that the company misrepresented the nature of specific services it provided to protect or alert consumers when their personal information had been compromised.
Under the agreement, LifeLock is prohibited from misrepresenting that its services: (1) Protects against all types of identity theft; (2) Constantly monitors activity on each of its customers consumer reports; (3) Always [assures] a prompt call from a potential creditor before a new credit account is opened in the customer’s name; and (4) Eliminates 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 also warned consumers about their heightened risk of identity theft when LifeLock did not have information to warrant such a warning.
Attorney General Hood said the FTC and the 34 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 state’s investigation.
Mississippi stands to receive $15,000 of the $1 million.
Hood further said that federal and state laws provide consumers with a variety of tools to help protect themselves against identity theft. Consumers who have a reasonable suspicion that they are or are about to become victims of identity theft can place free fraud alerts on their credit reports by contacting one of the three major credit reporting agencies.
In addition, consumers can obtain free copies of their credit reports to review their own credit histories and identify errors and inaccuracies, such as unauthorized accounts. Consumers are also best-positioned to monitor their own bank accounts and credit card statements for unauthorized withdrawals or charges.
States participating in LifeLock agreement include: Alaska, Arizona, California, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, 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.
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