Massachusetts Attorney General Martha Coakley and FTC Reach Multi-State Agreement with LifeLock Over Misleading Identity Theft Products
Identity Theft Protection Provider Agrees to Pay $11 Million for Consumer Restitution
"Our office has seen firsthand the type of damage that identity theft can inflict on a person's life and there are many free resources that consumers can take advantage of to protect themselves," said Attorney General Martha Coakley. "The best way to protect your personal information is to know who you are doing business with before giving out your personal information. We are pleased that consumers who purchased these so-called identity theft protection products will receive restitution under this settlement."
The FTC and the states began jointly investigating LifeLock amid allegations that the company made a range of deceptive claims misleading consumers to believe its services were a "proven solution" to protect against all forms of identity theft, including criminal, mortgage and child identity theft. The settlement also resolves allegations that the company misrepresented the specific services it provided to protect or alert consumers when their personal information had been compromised.
LifeLock sells identity theft protection 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." 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 from his or her, when in fact a phone call is not required by federal law.
Under the agreement, 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.
Federal and state laws provide consumers with a variety of free 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.
Consumers who believe they have been a victim of identity theft should file a complaint with the Federal Trade Commission. Additional information on identity theft can be found on Attorney General Coakley's website.
States participating in today's 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.
Assistant Attorney General Scott Schafer, Chief of Attorney General Coakley's Consumer Protection Division, and Assistant Attorney General Emily Armstrong, also of Attorney General Coakley's Consumer Protection Division, handled this matter.