LifeLock, the identity security company under fire for allegedly not delivering on security promises, has agreed to pay as much as $113 million to settle charges by the Federal Trade Commission that the company had violated terms of a previous settlement struck five years ago.
The settlement, as The Wall Street Journal reported Friday (Dec. 18), marks the largest one scored by the FTC tied to a previously obtained award.
Of the $113 million, the FTC gets $32 million, which will be earmarked to pay for making consumers whole in the event such action is mandated by state attorneys general. The company itself said that no such claims have been filed at the state level thus far. In addition, another $68 million will be used to satisfy claims in the class action suit that LifeLock had reached previously, as will be subject to court approval. The company itself said it has put aside $116 million to cover these costs.
As part of the terms of the agreement, LifeLock neither confirmed or denied the allegations.
The FTC has said that the company ran misleading advertisements over several years between 2012 to 2014. In particular, the FTC claims, focused, and still focus, on the claims made by the company that services had safeguards in place as strong as those harbored by financial institutions, along with alerts that were ostensibly to be sent in real time in the event of suspected identity theft.
Yet, in a statement in reference to the settlement, LifeLock stated: “The allegations raised by the FTC are related to advertisements that we no longer run and policies that are no longer in place. The settlement does not require us to change any of our current products or practices.” The settlement just announced noted that the company had not had proper internal controls to truly safeguard consumer data.
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