You've probably seen the LifeLock commercials on TV or heard them on the radio -- company CEO Todd Davis throws his Social Security number out there for everyone to write down. Do with it what you will, miscreants, because Davis has LifeLock protection!! You can't touch him!!
And, for $10 or $15 a month, you could get protected like that too.
Well, maybe. Today Texas Attorney General Greg Abbott, along with the Federal Trade Commissions and 34 other states, announced a settlement with LifeLock that kinda walks the company back from some of its claims. Not to mention the $11 million in restitution (And another $1 million to reimburse for the investigation's costs).
The joint investigation by the states and the FTC revealed that LifeLock unlawfully exaggerated its range of services and ability to prevent ID theft. LifeLock claimed its services were guaranteed to protect customers' personal information and prevent criminals from using that sensitive information to open accounts. Thus, customers were given the impression that identity thieves would be absolutely prevented from stealing LifeLock customers' identifying information.
State and federal authorities were also concerned about LifeLock marketing materials that improperly claimed that customers faced a heightened risk of ID theft - despite the fact that LifeLock had no basis for its claims.
The agreement says LifeLock will no longer claim it:
• Protects against all forms of ID theft;
• Eliminates the risk of ID theft;
• Constantly monitors activity on each of its customers' consumer reports;
• Always prompts a call from a potential creditor before a new credit account is opened in the customer's name.
LifeLock said it was "pleased" with the agreement, and that it settled to "quickly put this behind us."
We spoke with Davis, the man with the SSN everyone knows.
"Look," he told us, "obviously LifeLock and the FTC had differing views on how the company, in the past, should be sounding the alarm about the rapid increase in identity theft. So we may differ in our interpretation of what was intended in the early marketing and what people may have misunderstood; the reality is, though, we accept completely that there needs to be regulation in our industry."
Davis said his company was helping to "define its industry," like Microsoft did. He also kept saying the ads in question were from "years ago."
Hair Balls: You say "years ago" -- you were at the company, though, and you were doing it, right?
Davis: Oh, yeah. Right.
HB: So were you just doing too much, going too far? Do you agree that what you were saying was more than you were delivering?
Davis: Oh, I don't agree with that. But I understand that, you know, back in the early days, kinda like when cars were first around but there weren't speed limits, I understand that their view after the fact is we were speeding. Okay; there weren't definitions, there weren't speed limits, so we accept what their findings are.
So, we guess it's best to look at this like a speeding ticket.
A $12 million speeding ticket.