A well-known identity theft protection company has settled with the government regarding the company's advertising promises.
The U.S. Federal Trade Commission and 35 state attorneys general, including Missouri AG Chris Koster, announced Tuesday an agreement with Arizona-based LifeLock Inc. The FTC was investigating the company over allegations of a range of advertising claims that misled consumers, according to a news release from Koster's office.
LifeLock sells identity theft services, and past advertisements claimed the services were guaranteed to protect consumers' personal information and implied that individuals with fraud alerts on their consumer reports would always receive a phone call prior to the opening of new accounts, when a phone call is not required by federal law.
Consumers were led to believe that LifeLock's services were "a proven solution that would protect against all forms of identity theft, including criminal, mortgage, and child identity theft," according to the release.
Under the terms of the agreement, LifeLock is prohibited from advertising that its services:
• protect against all types of identity theft;
• constantly monitor activity on all customers' consumer reports;
• always prompt a call from a potential creditor before a new account is opened; or
• eliminate the risk of identity theft.
LifeLock has agreed to pay $11 million in restitution, and states will send letters to eligible customers notifying them of the agreement and how they can opt in to the settlement. The company also is paying $1 million to cover the costs of the investigation, of which Missouri will receive $11,000.
“In today’s high-tech world, it’s only reasonable to have concerns about identity theft,” Koster said in the release, “but consumers should be leery of any business that promises foolproof identity protection.”
The release also notes that consumers who are worried that they may become victims of identity theft can place free fraud alerts on their credit reports by contacting one of the three major credit reporting agencies, and free credit report copies are available once a year from each of the agencies.
