LifeLock paying $100M to consumers to settle US charges

The identity theft protection company is shelling out the cash after failing to properly secure its customers’ information and misrepresenting the strength of its security, the Federal Trade Commission announced Thursday.

Roughly $68 million of the settlement will go toward paying back customers who sued the company in a similar class action suit.

The settlement is the largest payout the FTC has ever won through an enforcement action.

It claims to scan “a trillion data points” daily for threats and offers a $1 million guarantee, according to its website. LifeLock paid a $12 million settlement that prohibited it from making misleading claims and required it to better protect its customer’s personal information.

Many details of what LifeLock actually did wrong still are sealed by a court order in the FTC’s civil lawsuit against the company, Jay Mayfield, an FTC spokesman, tells New Times.

The FTC claimed that while LifeLock claimed in its ads that the service could effectively block users from all identity theft, the actual product was only able to catch and stop a portion of identity theft activity.

LifeLock said the settlement neither confirms nor denies the allegations, and that the current charges are related to things the company is no longer doing. Finally, the FTC alleged that the company failed to abide by the order’s recordkeeping requirements. Under these terms, LifeLock must continue to keep its marketing and advertising practices honest, and adhere to strict monitoring rules that allow the FTC to obtain documents, interview company officials, and even pose as LifeLock customers or employees in order to determine if LifeLock’s in compliance. The company did not immediately return a request for comment on the settlement.

“There is no evidence that LifeLock has ever had any of its customers’ data stolen, and the FTC did not allege otherwise”, the statement said.

Any money not received by consumers in the class action settlement or through settlements between LifeLock and state attorneys general will be provided to the FTC for use in further consumer redress.

“The record lacks clear and convincing evidence that LifeLock failed to establish and maintain a comprehensive information security program created to protect the security, confidentiality, and integrity of consumers’ personal information”, she said in a statement.

Ohlhausen also wrote in a footnote: “My dissent focuses on the data security issues that underlie allegations one and two”.