For Immediate Release
Media Contact: Bob Cooper
(208) 334-4112

Date: March 10, 2010

Idaho Consumers to Receive Restitution from LifeLock Settlement

(Boise) – Idaho consumers will receive restitution payments as a result of a legal settlement agreement with LifeLock, Inc., an identity theft protection provider located in Tempe, Arizona, Attorney General Lawrence Wasden said today. The settlement, with the Federal Trade Commission and 35 states, stems from an investigation into the company’s alleged misleading advertising practices.

“Through the cooperative efforts of the FTC and state attorneys general, consumers who experienced problems with LifeLock’s services will receive restitution,” Attorney General Wasden said.

The FTC and states will send letters to eligible consumers, notifying them of the agreement and how they can opt-in to the settlement. LifeLock agreed to pay $11 million in restitution to consumers and $1 million to the states to cover the costs of their investigation.

The FTC and 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 resolves allegations that the company misrepresented the nature of specific services it provided to protect or alert consumers when their personal information had been compromised.

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.” 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.

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 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. If consumers suspect identity theft, they can place a security freeze on their credit.

To better inform consumers about fraud alerts, security freezes, and how to obtain annual free credit reports, the Attorney General publishes a free “Identity Theft” handbook.

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