Maybe LifeLock made one too many pitches.
The Arizona company, known for its blustery cofounder who used to publish his own Social Security number in ads for identity-theft protection, sent a letter a year ago to Illinois Attorney General Lisa Madigan.
“WARNING,” it said, “if you have used a credit or debit card before January 2009 YOU MAY BE AT RISK.”
Madigan didn’t like what she calls “scare tactics” and says the letter gave extra impetus on an inquiry already under way into how LifeLock’s performance stacked up against its advertising. Its conclusion: LifeLock’s multimillion-dollar ad campaigns were unfair and deceptive.
Yesterday, Madigan, 34 other states, and the Federal Trade Commission announced a $12 million settlement with LifeLock in which it agreed to change its business tactics, provide $11 million in refunds, and quit making exaggerated claims.
Madigan and FTC Chairman Jon Leibowitz said the case against LifeLock didn’t totally challenge the notion of selling identity-theft protection. Still, both urged consumers to consider free or low-cost methods of protecting themselves - including placing “fraud alerts” on their own credit files, a device that was the centerpiece of LifeLock’s initial business model.
“If you want to pay somebody to do that, that’s your choice. But don’t be misled …
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