Local News

LifeLock barred from misrepresenting services; consumers will get refunds

Posted March 9, 2010 2:15 p.m. EST

— LifeLock has been barred from misrepresenting its identity theft services after an agreement reached with North Carolina, 34 other states and the Federal Trade Commission, Attorney General Roy Cooper announced Tuesday.

Consumers who paid for LifeLock services will also get $11 million in refunds.

“Identity theft is a serious crime, and criminals aren’t the only ones trying to make money off of it,” Cooper said in a release. “Be careful of paying money for ID theft protection, as it can leave you with a false sense of security.”

LifeLock sells identity theft-protection services for $10 a month or $110 a year. Past advertisements for LifeLock have claimed the services were “guaranteed” to protect consumers’ personal information and prevent criminals from using it to open accounts in their names.

Some ads featured Chief Executive Todd Davis’ Social Security number largely displayed, which Davis said showed “how confident I am in LifeLock’s proactive identity theft protection.”

The investigation into LifeLock started one year ago because of concerns about misleading statements in some of the company’s ads, Cooper said.

The states, led by North Carolina and Illinois, worked with the FTC on the investigation and settlement.

Under the consent judgment filed Tuesday in North Carolina Superior Court, LifeLock is prohibited from representing that its services:

  • Provide complete protection against all types of identity theft
  • Constantly monitor activity on each of its customers’ consumer reports
  • Prevent unauthorized changes to customers’ address information
  • 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 barred from overstating the risk of identity theft to consumers.

People who signed up and paid for LifeLock services between April 1, 2005, and March 30, 2009, will have an opportunity to get a refund. LifeLock will pay $11 million to the FTC for consumer refunds. Eligible North Carolina consumers will get a letter from Cooper and the FTC with details about how to claim their refund.

LifeLock will also pay $1 million to the states, including $100,000 to North Carolina, for investigative costs and consumer protection efforts.

Cooper is encouraging North Carolinians to take free steps to protect themselves from ID theft.

“Consider a free security freeze to stop criminals from being able to open new accounts in your name and check your credit regularly,” Cooper said.

Under a new state law, people in North Carolina can guard against identity theft by freezing their credit reports online for free.