FTC, states: LifeLock's ads are misleading

By Andy Wise - bio | email

MEMPHIS (WMC TV) - Its ads and commercials are practically pop culture:  the boss plastering his Social Security number all over the place to prove his service works.

Now LifeLock will have to scale back those claims a bit -- to the tune of $12 million.

The Federal Trade Commission and attorneys general from 35 states -- including Tennessee and Mississippi -- settled with the Tempe, AZ-based identity protection service over claims that LifeLock misled consumers "...by claiming its services were a 'proven solution' that would protect them against all forms of identity theft including criminal, mortgage and child identity theft."

According to a press release from Tennessee Attorney General Bob Cooper, the LifeLock settlement "...also resolves allegations that the company misrepresented the nature of specific services it provided to protect or alert consumers when their personal information had been compromised."

"There are no guarantees that any company can protect consumers from identity theft," said Cooper. "In truth, most people can monitor and safeguard their own private information at no cost better than a company selling so-called 'proven' protection..."

Cooper also claimed LifeLock hyped its services by exaggerating the risks of identity theft in print ads designed to look like news articles.

"LifeLock's service didn't stop the misuse of existing credit card accounts, didn't stop the misuse of existing bank accounts, and those are really among the most common types of identity theft," said FTC Chairman John Leibowitz.

I've witnessed LifeLock's service in action and have interviewed Mid-South LifeLock customers.  I've also interviewed the company's CEO, Todd Davis, the one whose Social Security number appears in the ads.

Davis and his staff have always explained LifeLock is not a fail-safe service.

In fact, if a LifeLock member's identity is compromised, Davis said all the member has to do is file a police report. LifeLock takes it from there, contacting the member's banks, credit card companies, etc. LifeLock will reimburse any cash loss the member suffers up to $1 million.

LifeLock's folks have also been honest about how some of its fee-based services - credit report checks, fraud alerts - are services that consumers can perform for free, directly with the credit bureaus. The difference is LifeLock regularly updates those alerts for its members.

Here's a link to one of my Ask Andy stories that details some Mid-South LifeLock members' experiences with the service:  http://www.wmctv.com/Global/story.asp?S=9717620.

"LifeLock is pleased with this agreement, which works to set advertising standards for the entire identity theft protection industry," said Davis in an e-mail statement to Action News 5. "We will abide by the terms of this consent decree because we intend to continue to be true to our core mission -- to help protect you, your family and your friends from identity theft."

Here's a link to the FTC's release on the LifeLock settlement:  http://ftc.gov/opa/2010/03/lifelock.shtm.

For the Tennessee attorney general's release on the LifeLock settlement, please click on this:  http://www.tennessee.gov/attorneygeneral/press/2010/story/pr10-10.pdf

Copyright 2010 WMC-TV. All rights reserved.