ID theft marketer will refund $11 million

An Arizona company that markets identification theft protection services has agreed to refund $11 million to customers in Iowa and 34 other states.

LifeLock Inc. of Tempe, Ariz., also has agreed to change its advertising practices to settle lawsuits by the states and the Federal Trade Commission. The company also will pay $1 million to the 35 states that investigated its marketing practices.

“We alleged LifeLock ads sometimes overstated the risk of identity theft, exaggerated what their services could do to protect consumers, and misrepresented what it would reimburse consumers who suffered losses,” said Iowa Attorney General Tom Miller in a statement released Tuesday.

LifeLock charges customers $10 per month or $110 per year for identity theft protection services. Under the agreement, LifeLock is prohibited from misrepresenting that its services:

• Protect against all types of identity theft;

• Constantly monitor activity on each of its customer's consumer reports;

• Always prompt a call from a potential creditor before a new credit account is opened in the customer's name;

• Eliminate the risk of identity theft.

Miller's office will file a lawsuit alleging LifeLock violated Iowa's Consumer Fraud Act, primarily by misleading advertising. The Polk County District Court will be asked to approve an order including terms of an agreement the states and the Federal Trade Commission reached with LifeLock about its marketing practices.

The Federal Trade Commission and the states will jointly send letters to eligible consumers, notifying them of the agreement and how they can opt-in to the settlement. The federal agency will set up a toll-free number to answer questions from consumers.

The Federal Trade Commission and the states began investigating LifeLock after receiving complaints that the company was misleading consumers to believe its services were a “proven solution” to all forms of ID theft.

There also were allegations that LifeLock misrepresented the nature of specific services it provided to protect or alert consumers when their personal information had been stolen.

LifeLock's ads also implied that individuals with fraud alerts on their consumer reports will always receive a phone call before a new charge account is opened. Federal law does not require such a notification.

Iowans with questions are encouraged to go to www.IowaAttorneyGeneral.gov for updates on restitution information and the Federal Trade Commission toll-free number when it is established.