LifeLock to Pay $100M to Settle FTC Charges

(CN) - LifeLock will pay $100 million to settle charges it violated a 2010 federal court order that requires it to secure consumers' personal information and prohibits it from deceptive advertising, the Federal Trade Commission announced Thursday.

The amount to be paid by the company is the largest monetary award obtained by the commission in an enforcement action.

"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," FTC Chairwoman Edith Ramirez said in a written statement.

"The fact that consumers paid LifeLock for help in protecting their sensitive personal information makes the charges in this case particularly troubling," Ramirez said.

In a complaint filed in July, the agency alleged Lifelock violated four components of the 2010 order.

First, the FTC said, 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.

Second, the agency said that during this period LifeLock falsely advertised that it protected consumers' sensitive data with the same high-level safeguards used by financial institutions.

Third, the FTC alleged that, from January 2012 through December 2014, LifeLock falsely advertised that it would send alerts "as soon as" it received any indication that a consumer may be a victim of identity theft.

Finally, the FTC alleged that the company failed to abide by the order's recordkeeping requirements.

Under the terms of the settlement, LifeLock must deposit $100 million into the registry of the federal court in Arizona.

Of the total, $68 million will be used to redress fees paid to LifeLock by class action consumers who were allegedly injured by the same behavior alleged by the FTC.

These funds must be paid directly to and received by consumers, and may not be used for any administrative or legal costs associated with the class action.

Any money not received by consumers in the class action settlement or through settlements between LifeLock and state attorneys general will be provided to the FTC for use in further consumer redress.

In addition to the settlement's monetary provisions, recordkeeping rules similar to those in the 2010 order have been extended to 13 years from the date of the original order.

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