LifeLock to Pay $100 Million to Settle FTC Contempt Charges

Photo (cc) by Don Hankins

A company that consumers pay to help them protect their personal information is in hot water with the Federal Trade Commission for allegedly failing to safeguard that sensitive information and making bogus statements about its services.

LifeLock has agreed to pay $100 million to settle FTC charges that it violated a 2010 federal court order that barred it from using false claims to promote its services and required that the company take steps to more thoroughly protect customers’ personal information.

The FTC said the $100 million settlement with the Arizona-based identity theft protection firm is the largest sum the agency has ever imposed in an order enforcement action. LifeLock paid $12 million in 2010 to settle charges that it used deceptive advertising to promote its services.

“The fact that consumers paid LifeLock for help in protecting their sensitive personal information makes the charges in this case particularly troubling,” FTC chairwoman Edith Ramirez said in a statement.

LifeLock’s services, which start at $9.99 a month, include monitoring customers’ accounts, providing an early warning if identity theft occurs and helping customers’ restore their stolen identity.

Most of the $100 million in settlement funds will be used to reimburse LifeLock customers.

Lifelock, which has neither confirmed nor denied the FTC’s allegations, said it has implemented system upgrades to better protect its customers’ data.

“The allegations raised by the FTC are related to advertisements that we no longer run and policies that are no longer in place,” the company said in a statement. “There is no evidence that LifeLock has ever had any of its customers’ data stolen, and the FTC did not allege otherwise.”

(Check out our earlier reporting on services that charge to protect your identity — and four excellent reasons not to bite.)

Because data breaches are seemingly commonplace these days, many consumers are understandably worried about safeguarding their personal information. But the FTC said it’s important to do your homework before you pony up the cash to hire an identity theft protection company.

Before you pay any fees, evaluate the company and its track record. Type the name of the company or product into a search engine along with words like “review,” “complaint,” or “scam.” Be sure to read a few reviews — don’t rely on just one source. Or, you may decide to take matters into your own hands by reviewing your credit reports on a regular basis or placing a credit freeze on your report.

Have you used an identity theft protection firm before? Share your experiences below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
Small Splurges That Make It Feel Like You’re Living Large
Small Splurges That Make It Feel Like You’re Living Large

Cutting costs is the shortest path to financial freedom. However, there are times when a little spending can produce big returns.

Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?
Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

You could save more than $30,000 by setting aside these costly expenses for just one year.

8 Things I Always Buy at Target
8 Things I Always Buy at Target

I grew up shopping at the original Target store and am a lifelong fan. Here are my favorite purchases.

2-Minute Money Strategy: How Should I Invest My Retirement Savings?
2-Minute Money Strategy: How Should I Invest My Retirement Savings?

If retirement is on the horizon, you can’t afford to take too much risk, but you also need to make as much as possible. Here are your options.

7 Ways to Save Money Without Trying
7 Ways to Save Money Without Trying

Saving money doesn’t always mean drudgery and sacrifice. These tools make it easy — sometimes even fun.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

7 Social Security Rules Everyone Should Know by Now
7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

Is Writing a Check Still Safe?
Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

6 Ways to Protect Your Retirement Accounts From Hackers
6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

9 Mistakes People Make When Cleaning With Vinegar
9 Mistakes People Make When Cleaning With Vinegar

Cleaning with vinegar can save you a lot of money, but using it like this can cost you.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

4 States Where Taxes on Social Security May Fall Soon
4 States Where Taxes on Social Security May Fall Soon

These states are considering reducing — or even eliminating — income taxes on Social Security benefits.

10 Things Successful Retirees Do Differently
10 Things Successful Retirees Do Differently

These habits and characteristics can help put you on the track to success.

7 Hidden Sections of Amazon Every Shopper Should Know
7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

7 Costly Health Problems That Strike After Age 50
7 Costly Health Problems That Strike After Age 50

As we age, our bodies wear down. Here is how to cut costs associated with some common ailments.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.