FTC hits LifeLock again, with $100 million penalty

Identity-theft protection giant LifeLock has agreed to pay $100 million to settle contempt of court charges brought by the Federal Trade Commission for allegedly violating a 2010 federal court order, the FTC announced on Thursday.

LifeLock was accused of breaching an agreement prohibiting deceptive advertising and for failing to protect consumers' personal information. This is the largest monetary award obtained by the FTC 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 statement. "The fact that consumers paid Lifelock for help in protecting their sensitive personal information makes the charges in this case particularly troubling."

In agreeing to the settlement, of which $68 million is set aside to compensate consumers, LifeLock did not admit any wrongdoing. The settlement also closes out similar allegations lodged in class actions and charges by state attorneys general.

Between October 2012 and March 2014, the FTC said, LifeLock didn't set up or maintain a security program to safeguard such information as its users' Social Security, credit card and bank account numbers. At the same time, the company ran ads boasting "it protected consumers' sensitive data with the same high-level safeguards used by financial institutions," the FTC said.

In addition, the agency said LifeLock falsely claimed it would immediately send alerts to consumers when there was an indication they could be identity theft victims.

"The allegations raised by the FTC are related to advertisements that we no longer run and policies that are no longer in place," the company said in a statement. "The settlement does not require us to change any of our current products or practices. Furthermore, there is no evidence that LifeLock has ever had any of its customers' data stolen, and the FTC did not allege otherwise."

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    Mitch Lipka is an award-winning consumer columnist. He was in charge of consumer news for AOL's personal finance site and was a senior editor at Consumer Reports. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other publications.