FTC says LifeLock failed consumers

False claims, personal information at issue

The Federal Trade Commission is asking that LifeLock, the identity theft protection service, compensate consumers for its failure to abide by a court settlement that required it to stop making false claims and to do a better job protecting consumers’ personal information.

Federal officials asked the U. S. District Court for the District of Arizona on Tuesday to order LifeLock to provide redress to all customers it says were affected by the company’s failure to meet the terms of the 2010 settlement.

In papers filed with the court, FTC officials say the 2010 order that settled complaints by the FTC prohibited LifeLock from making any more false claims, mandated the company do a better job of protecting its customers’ private data and called for the company to refund customers $ 12 million.

But from at least October 2012 and March of last year, federal trade officials say LifeLock did not set up sufficient security measures for information such as Social Security numbers, credit cards and bank accounts, though the company falsely claimed it used the same standards as banks and other institutions to safeguard such details. It also didn’t meet the settlement’s standards for maintaining records, according to the FTC.

And from at least January 2012 through December 2014, the FTC accuses LifeLock of misleading consumers by claiming it sent out alerts “as soon as” a red flag emerged.

But in a statement LifeLock denied the accusations.

“We disagree with the substance of the FTC’s contentions and are prepared to take our case to court,” the statement said.

“We are committed to maintaining high standards and to continual improvement.”

LifeLock stock plunged 49% to close at $ 8.15 Tuesday after news of the court filing broke.