LifeLock ID protection firm agrees to change practices
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From: Ablang on 28 Mar 2010 09:15 LifeLock ID protection firm agrees to change practices By Claudia Buck Published: Wednesday, Mar. 10, 2010 - 12:00 am | Page 8B http://www.sacbee.com/2010/03/10/2595519/lifelock-id-protection-firm-agrees.html LifeLock Inc., the identity theft protection company whose ads have widely aired on TV, on radio and in print, must cease "misrepresenting and overstating" its services under a settlement announced Tuesday by state and federal officials. Thousands of consumers in California and 34 other states who signed up for the company's services in recent years will be eligible to receive $11 million in restitution, according to the announcement by state attorneys general in 35 states and the Federal Trade Commission. In its lawsuit, the California attorney general's office says LifeLock falsely implied that consumers would be protected against all forms of identity theft, reimbursed directly for losses tied to identity theft and telephoned prior to any new credit being issued in their name. None of those claims, according to the complaint, proved true. "It's critical that the advertising is not misleading and is not based on false claims and inflated promises," said Evan Westrup, spokesman for the attorney general's office. "The settlement means LifeLock will have to make some serious and substantive changes to the way they advertise their services." The investigation into LifeLock's business practices was launched amid numerous complaints by consumers nationwide. The Tempe, Ariz.-based company said it has more than 224,800 enrolled customers in California. One of LifeLock's former customers, Jesse Swisher, a cell phone technician in Sacramento, said he signed up three years ago after becoming an identity theft victim to someone who stole his bank account information. "I was hoping it would give me a little relief" after spending hours spent canceling credit cards and bank accounts, Swisher said. But after paying for a year's service, he quickly realized that "most of what they do, we can do on our own as educated consumers." After 45 days, Swisher said he canceled the service and received a full refund. LifeLock charges $110 for its basic identity theft package. Some of its services, such as putting a freeze on a credit file or requesting an annual credit report, can be done by consumers themselves at no cost. Under terms of the settlement, the company also must stop overstating the risk of identity theft to individual consumers. According to the attorney general's office, LifeLock often sent letters warning that "You're receiving this (letter) because you may be at risk of identity theft," without any facts or information to substantiate that claim. "They were putting on a hard sell," noted Westrup. In some ads, LifeLock CEO Todd Davis gave out his own Social Security number, vowing that LifeLock's services would prevent anyone from stealing his identity and opening accounts in his name. In a statement Tuesday, Davis said LifeLock "is pleased with this agreement, which, for the very first time, works to set advertising guidelines for the entire industry. We welcome federal and state efforts to regulate our industry, because doing so helps to protect consumers from the risks of identity theft." The company said the settlement involved "old practices and products" that are not part of LifeLock's current services. Westrup said the attorney general's office and the FTC would be sending out letters in the next two weeks about applying for refunds to former and current customers who purchased LifeLock identity theft services between April 1, 2005, and March 30, 2009. For more information, visit the FTC's Web site, www.ftc.gov/lifelock, or call (202) 326-3757. |