LifeLock Reaches $116M Settlement with FTC over False Ad Claims

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LifeLock Inc. has reportedly agreed to pay $116 million in a settlement with the Federal Trade Commission related to allegations the identity theft prevention company violated the terms of a previous settlement reached with the federal agency.

In 2010, the FTC announced that it had reached a $12 million settlement with LifeLock, resolving a false advertising lawsuit that alleged LifeLock deceived consumers about its ability to protect them from identity theft.

In addition to providing refunds to consumers, the 2010 LifeLock settlement also prohibited the company from making further deceptive claims about its services and required the company to implement better safeguards to protect customer data.

The 2010 LifeLock class action settlement also resolved complaints brought forth by the attorneys general of 35 states across the country. Nearly 1 million LifeLock customers were reportedly sent settlement checks for $10.87, approximately the price of a one-month LifeLock membership.

This summer, the FTC asked an Arizona federal court to impose an order requiring LifeLock to comply with the earlier settlement and provide redress to consumers harmed by the company’s failure to meet its obligations from October 2012 through March 2014. According to the FTC, LifeLock failed to maintain a comprehensive information security program to protect user data, failed to meet recordkeeping requirements, and falsely advertised its identity theft prevention services during this time period.

The FTC also alleged that from January 2012 through December 2014, LifeLock falsely claimed that it provided alerts to customers as soon as they became aware of a potential problem.

On Wednesday, the FTC asked the court to stay its bid to hold LifeLock in contempt for failing to meet its obligations under the 2010 settlement while the current proposed settlement is finalized.

“The proposed FTC settlement does not require us to change our current products, services, or business and information security practices, including in particular, our current marketing and advertising practices,” according to a post on the LifeLock website. The settlement must be approved by the FTC and a federal judge before it can become final.

According to LifeLock, the company had prepared for a large settlement by setting aside $116 million in reserve funds.

More information about the terms of the LifeLock settlement was not immediately available. Keep checking TopClassActions.com or  sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

The Federal Trade Commission is represented by Elisa Jillson, Gregory Madden and Hong Park.

The LifeLock False Advertising Lawsuit is Federal Trade Commission v. LifeLock Inc., et al., Case No. 2:10-cv-00530, in the U.S. District Court for the District of Arizona.