LifeLock, an identity theft protection company, has been ordered to pay $100 million to the US Federal Trade Commission for failing to protect user information. The settlement comes as a result of the company’s failure to adhere to a 2010 federal court order which required the company to secure consumers’ personal information and stop deceptive advertising practices. The FTC alleges that “from at least October 2012 through March 2014, LifeLock 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.”
The company has been under significant scrutiny in the past. Last month, an Arizona woman claimed her ex-husband had used LifeLock’s credit monitoring service to create an account in her name and secretly track her transactions. According to USA Today, “Suzanna Quintana, 47, says that when she applied for credit cards, leased a car, signed a cellphone contract and opened a bank account, her ex-husband received emails and alerts detailing the activity.” LifeLock was criticized at the time for failing to address the woman’s complaints or assist her with the situation until the case received media attention. In 2007, LifeLock’s CEO Todd Davis publicly revealed his Social Security number as part of an advertising campaign to promote the company’s identity theft protection service. Subsequently, Davis had his identity stolen 13 times.
As the company is often utilized by the victims of a data breach for credit monitoring and identity theft protection, the FTC ruling has significant impact for the company’s reputation as well as overall consumer confidence. “This settlement demonstrates the Commission’s commitment to enforcing the orders it has in place against companies, including orders requiring reasonable security for consumer data,” said FTC Chairwoman Edith Ramirez. “The fact that consumers paid LifeLock for help in protecting their sensitive personal information makes the charges in this case particularly troubling.”
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