FTC Orders LifeLock To Pay $100 Million To Settle Claims About Deceptive Marketing Techniques – Company Falsely Assured Complete Protection From Identity Theft?

LifeLock has been asked to deposit $100 million for a settlement claim by FTC. The Federal Trade Commission (FTC) had charged the company for making deceptive claims about identity theft protection capabilities. The agency even charged the company for failing to take adequate measures to protect customers' personal data under a previous court order.

LifeLock has agreed to deposit $100 million to settle charges by federal regulators that the company failed to take adequate measures to protect customers' personal data under a court order, reported NBC News. The substantially increased settlement comes five months after federal and state regulators had accused LifeLock of violating an earlier settlement that was reached with the FTC. Back in 2010, the company paid $12 million for allegedly using false claims regarding the effectiveness of its services.

On Thursday, the company was ordered to pay $100 million for once again misleading consumers. The amount is the sum total of penalties and refunds, which will be disbursed to the customers who were unhappy with the promises made by the company. The agency says it's the largest settlement it has won in this type of enforcement case, reported Dallas News.

The FTC announced the latest settlement after concluding that from October 2012 to March 2014, LifeLock violated the four core components that were categorically agreed to, during the previous settlement.

LifeLock To Pay $100 Million To Settle Claims About Deceptive Marketing Techniques
[Image via LifeLock]

During the 2010 settlement, a federal court had mandated LifeLock Inc. to secure customers' data, such as credit card and Social Security numbers. Additionally, it was warned to steer clear of making false advertising claims that may mislead the customers about the abilities of the company to comprehensively safeguard their digital data. Essentially, under the previous settlement, LifeLock was specifically reprimanded for supposedly making deceptive claims and asked not to do so in the future. The company had allegedly made some promises about services that could be considered practically impossible to follow through. Furthermore, it was required to take more stringent measures to safeguard the personal information it collects from customers.

As per the final settlement in 2010, LifeLock had not only paid $12 million but also promised it will not misrepresent that its services offer "absolute protection against identity theft because there is, unfortunately, no foolproof way to avoid ID theft," reported the Consumerist.

In the recent $100 million settlement, FTC had alleged that LifeLock did not stay true to its promises. The FTC maintained that the company "failed to establish and maintain a comprehensive information security program to protect users' sensitive personal information, including their social security, credit card and bank account numbers." Despite the alleged shortcomings in the way LifeLock protected customer data, the company continued to advertise regularly that it protected consumers' sensitive data with the same high-level safeguards used by financial institutions. FTC added that during the aforementioned period, LifeLock even falsely advertised it would send alerts "as soon as" it received any indication that a consumer may be a victim of identity theft.

LifeLock To Pay $100 Million To Settle Claims About Deceptive Marketing Techniques
[Image via LifeLock]

Though LifeLock has agreed to the $100 million settlement, the company maintains its innocence.

"We have already done system upgrades and taken other steps to address issues raised by the government. The allegations raised by the FTC are related to advertisements that we no longer run and policies that are no longer in place. The settlement does not require us to change any of our current products or practices. Furthermore, there is no evidence that LifeLock has ever had any of its customers' data stolen, and the FTC did not allege otherwise."

As part of the settlement reached on Thursday, LifeLock is required to refrain from misrepresenting how much they can do to protect their customers from identity theft and to implement a data security program, according to a court filing, reported Reuters.

[Photo by Andrew Harrer/Getty Images]