Lifelock admits to misleading the public and ordered to pay $12 Million.

LifeLock agreed to pay $12 million Tuesday to settle claims brought by the Federal Trade Commission and 35 states that the identity security company overstated its ID theft protection services and exaggerated consumer risk.
One of the largest joint FTC-state settlements on record, the final judgment in San Diego Superior Court prohibits LifeLock from overstating its services or inflating consumers' risk of identity theft.

According to the joint investigation, LifeLock falsely advertised that it could remove personal information from criminal Web sites if the information had been obtained illegally. But in reality, investigators say, LifeLock only notified consumers when their information had been compromised.
LifeLock further agreed to stop promising customers that they were protected against all forms of identity theft, that they would be reimbursed for losses if their identities were stolen, and that they would receive phone calls before any new credit accounts were opened in their names.
LifeLock also said it would no longer promise to constantly monitor customers' consumer reports or prevent unauthorized changes to their address information.

The FTC’s complaint charged that the fraud alerts that LifeLock placed on customers’ credit files protected only against certain forms of identity theft and gave them no protection against the misuse of existing accounts, the most common type of identity theft. It also allegedly provided no protection against medical identity theft or employment identity theft, in which thieves use personal information to get medical care or apply for jobs. And even for types of identity theft for which fraud alerts are most effective, they do not provide absolute protection.

Links: http://www.courthousenews.com/2010/03/09/25398.htm
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