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LifeLock settles FTC charges of false advertising

March 10th, 2010 joshua

LifeLock has agreed to pay $12 million to settle charges thats it made false claims about its identity theft-protection services.

In a record-breaking settlement reached with the Federal Trade Commission and state Attorneys General, LifeLock will pay $11 million to the FTC and another $1 million to states which filed lawsuits against it.

FTC Chairman Jon Leibowitz told CNN that LifeLock promised services it couldn’t deliver. He said the company promised complete identity theft protection, but “left enough holes that you could drive a truck through it.”

LifeLock charges $10 a month to protect consumers from ID theft, one of the fastest-growing crimes in the U.S. The company made false claims that it offered guaranteed protection, which it didn’t; and that it was the first company to successfully prevent identity theft from happening, also another false claim.

Regulators said LifeLock’s “fraud alerts” gave no protection from misused accounts, the most common type of ID theft.

The company was also accused of collecting Social Security and credit card numbers from its customers.

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