Survey: Ponemon Lists The Top 20 Most Trusted Firms For Privacy
Huge Data Breach Potential From Used Copy Machines

Lifelock Settles With the FTC: Company To Pay $12 Million

The U.S. Federal Trade Commission (FTC) reported:

"LifeLock, Inc. has agreed to pay $11 million to the Federal Trade Commission and $1 million to a group of 35 state attorneys general to settle charges that the company used false claims to promote its identity theft protection services, which it widely advertised by displaying the CEO’s Social Security number on the side of a truck. In one of the largest FTC-state coordinated settlements on record, LifeLock and its principals will be barred from making deceptive claims and required to take more stringent measures to safeguard the personal information they collect from customers. “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,” said FTC Chairman Jon Leibowitz."

Lifelock began marketing its service in 2006. Radio entertainer Rush Limbaugh promoted the service. In 2008, the credit reporting agency Experian sued Lifelock. During the same year, consumers in several states sued Lifelock about the quality of its service.

The FTC news release also added:

"The FTC’s complaint charged that the fraud alerts that LifeLock placed on customers’ credit files protected only against certain forms of identity theft and gave them no protection against the misuse of existing accounts, the most common type of identity theft. It also allegedly provided no protection against medical identity theft or employment identity theft, in which thieves use personal information to get medical care or apply for jobs. And even for types of identity theft for which fraud alerts are most effective, they do not provide absolute protection."

From time to time, friends and coworkers ask me what I think of Lifelock's service. I usually direct them to the product review by the folks at Consumers Reports. And I encourage them to closely review the Lifelock terms of the service, so they know what they are paying for. I also encourage them to read this blog so they can learn what they can do themselves -- like fraud alerts -- for free.


Feed You can follow this conversation by subscribing to the comment feed for this post.


Another very important element to the Lifelock settlement is the FTC's allegations that Lifelock did not protect it's customer's data. The Red Tape Chronicles blog provides details:

Bill Garner

Lifelock has done one of the best jobs of promotion and marketing in the history of business. I have never understood how top named Radio host and name brand companies fell for their hype. It really is sad. Not all IDT services are created equal...lot's have been in business less than three years and don't provide what their customers believe they provide:(

Account Deleted

Lifelock has done one of the best jobs of promotion and marketing in the history of business.


George, you are providing a valuable service with this blog. Thank you. A year or so ago, you posted a list of proposed government actions to reduce the identity theft problem. Here is another suggestion:

You can't expect the police to catch every petty criminal involved in ID theft. There has to be a law requiring retailers to make a reasonable effort to verify the identity of people who apply to open a new account. Those retailers that do not verify the identity of their customers should be barred from hiring collection agencies and barred from posting negative information on credit files at the three national credit reporting agencies.

My own identity theft involved an account opened at a mail order company, which the police told me has ignored their advice to install fraud control software. The retail value of the stolen (fraudulently obtained) merchandise was less than $200, but it took me 70 hours to clean up my credit. The police told me the mail order company shipped merchandise to six different names with six different social security numbers at the same address in St. Louis, MO. The mail order company had flagged the account as potentially fraudulent before they turned the account over to a bill collection agency.

The retailer relies on the honesty of most credit applicants, and hopes to occasionally recover unpaid bills through a collection agency. The retailer is ignoring the fact that this business practice imposes a huge cost on society at large, and more specifically on the victims of the identity theft. The cost to the victims is orders of magnitude greater than their losses on the unpaid bills.

Retailers who approve credit to people without checking identity are greater criminals than the street gangs that use stolen social security numbers to get free merchandise. Credit laws need to be modified to stop the retailers from doing this.

(Experian Triple Alert only caught this problem when the collection agency placed a negative item on my credit file. I don't think LifeLock would have caught it any sooner. Perhaps LifeLock would have helped more than Experian in cleaning up the mess. I don't know.)



You are welcome. Glad that I have been able to help.

You story is interesting and troubling for several reasons. I hope that you have filed a complaint with both the FTC and the Better Business Bureau about this retailer. If you have filed complaints with both, I would be interested in the replies you have received from both agencies and the retailer. I would also be interested in the specific fraud control software this retailer refused to use. Consumers should know this retailer by name and be warned of the risks of shopping there.

If you don't want to share your story at the blog, there are websites like and where you can submit your story.


The comments to this entry are closed.