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, Ariz., promoted by conservative radio talk show host Rush Limbaugh.
Attorney General Lawrence Wasden said Friday the settlement with the Federal Trade Commission and 35 states stems from an investigation into the company’s alleged misleading advertising practices.
The FTC began investigating LifeLock amid allegations that the company made 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. Consumers also alleged the company misrepresented 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.”
But the FTC and state officials didn’t share that same confidence.
“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.
Under the agreement, LifeLock is prohibited from misrepresenting that its services can do the following:
• 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.
• 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.