Identity Theft Protection Company LifeLock Fined $100 Million for Deceptive Sales Practices
Identity theft protection services company LifeLock® has been in trouble for deceptive practices and misleading consumers in the past but lately have been taking even more heat than before.
In 2010, LifeLock entered into a settlement agreement with the Federal Trade Commission after it was accused of making false claims regarding the effectiveness of its identity theft protection services. Under the agreement, LifeLock paid $11 million. Now, after violating that agreement, LifeLock has been ordered to pay an additional $100 million in penalties and refunds. The money will be deposited with the U.S. District Court for the District of Arizona but will be paid directly to consumers harmed by LifeLock’s violations.
“This settlement demonstrates the Commission’s commitment to enforcing the orders it has in place against companies, including orders requiring reasonable security for consumer data,” said FTC Chairwoman Edith Ramirez. “The fact that consumers paid Lifelock for help in protecting their sensitive personal information makes the charges in this case particularly troubling.”
This settlement comes at bad time for LifeLock since it was recently revealed that LifeLock was used by a man to stalk his ex-wife in Gilbert, Arizona. The woman, Suzanna Quintana, had her financial life monitored by her ex-husband using LifeLock’s identity theft protection services. The kicker is when LifeLock found out about the stalking, it stonewalled the Arizona woman and refused to help her clear up the matter. They even refused to provide the Arizona woman with information when she involved the police. Eventually, LifeLock gave in but not before making Quintana suffer needlessly.
“They didn’t listen to me. It’s almost like they didn’t believe me,” Quintana said. “They did not want to admit what they’d done. Since they are an identity-protection company, it was not in their best interest to admit my identity wasn’t protected. They tried to shift the blame to me.”
LifeLock allowed Quintana’s ex-husband to track her financial accounts, credit scores, credit reports, and public records as if he was the subject of the records. Quintana discovered the intrusion when one of her sons found a five-page spreadsheet on her ex-husband’s computer that documented her bank accounts, credit cards, and other financial activity using a LifeLock account in her name.
Kelley Bonsall, LifeLock’s Vice President of Media Relations and Corporate Social Responsibility, said in a public statement, “We’re distressed that someone was able to use our service to victimize his (ex-)wife. There’s often little a company can do to stop someone who is intent on causing harm using the personal information of a partner, but we owe this victim an apology because we did not assist her with the speed and care that the situation required.”
LifeLock® is a trademark of LifeLock, Inc.