The Federal Trade Commission (FTC) is going after identity theft protection company LifeLock for allegedly misrepresenting the protectio.n it provides for customers. LifeLock offers multiple services that are meant to reduce identity theft as well as limit the amount of damage that’s done if a customer’s personal data is hacked, including sending alerts of suspicious activity pertaining to a customer’s credit card or bank account as well as any data breaches that may affect their information.
According to the accusation brought by the FTC, LifeLock is allegedly continuing to violate a $12 million 2010 settlement in which the company agreed to set up a comprehensive program set to protect sensitive data like Social Security, credit card, and bank account numbers. Additionally, LifeLock is being accused of falsely advertising that customer data has the same level of protection that financial institutions provide for their clients. The FTC is asking a court to find LifeLock in contempt and to provide some sort of compensetion to its customers.
“It is essential that companies live up to their obligations under orders obtained by the FTC,” said
LifeLock fired back at the FTC’s accusations, stating that the agency’s actions and statements are related to past business practices. LifeLock also stated that it’s been cooperating with the FTC for over a year and that it is prepared to defend itself in court.
Shares of LifeLock Inc. were suspended temporarily; when trading resumed the stock price dropped by nearly half, finishing at $8.15. The stock is continuing its freefall and is currently at $7.66