LifeLock fined $100 million for false claims
It turns out that my skepticism was well-founded. LifeLock this week agreed to pay a $100 million fine levied by the Federal Trade Commission for not delivering on its extravagant promises.
“The fact that consumers paid LifeLock for help in protecting their sensitive personal information makes the charges in this case particularly troubling,” Edith Ramirez, the FTC chairwoman, said in a press release announcing the fine.
The huge fine, one of the largest ever levied by the FTC, didn’t just fall out of the sky. Federal and state regulators five months ago accused LifeLock of violating a 2010 settlement in for similar offenses for which the company paid a $12 million fine.
The agency said that LifeLock falsely claimed in advertisements that it had security systems that were as strong as those used by financial institutions. The company also failed to fulfill a promise that it would inform users when their data was breached, the agency said.
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LifeLock charges from $10 to $30 a month for its services, depending on the level of protection you buy. Naturally, its website labels the most expensive option as “best value.”
At the time of the 2010 settlement, former FTC Chairman Jon Leibowitz condemned the company in an unusually harsh statement, saying “While LifeLock promised consumers complete protection against all types of identity theft, in truth, the protection it actually provided left enough holes that you could drive a truck through it.”
For the record, here’s what the company said about this week’s action: “The allegations raised by the FTC are related to advertisements that we no longer run and policies that are no longer in place. The settlement does not require us to change any of our current products or practices.”
My reaction: Given that this company is a serial offender, I wouldn’t spend a dime on its so-called protection.
Identity theft, of course, is a real and very serious issue. But you don’t need a LifeLock, even if it was legit, to protect yourself.
First and foremost, keep an eye on your bank account and credit card statements. False charges show up pretty quickly and unless they are very large they’re easy to miss. You can also check your credit reports without paying companies like Freecreditreports.com.
Credit laws mandate that consumers can obtain a free credit report once a year from each of the three credit reporting agencies. AnnualCreditReport.com is the site you can go to in order to get reports from each of the three main bureaus — Experian, Equifax, and TransUnion — once per year for no cost. (Tip of the hat to Consumerist.com for laying this out so clearly.)