LifeLock to pay record $100 million settlement with FTC

LifeLock agreed to pay $100 million to settle with the FTC.
LifeLock agreed to pay $100 million to settle with the FTC.

The Federal Trade Commission (FTC) today approved a $100 million settlement with LifeLock over a 2010 contempt charge, the largest such payout in FTC history.

The settlement stems from contempt charges that had the FTC saying that LifeLock violated the terms of a 2010 federal court order that required the company to secure consumers' personal information and prohibits the company from deceptive advertising. This is the largest monetary award obtained by the FTC in an order enforcement action, the commission said.

LifeLock will place the $100 million in to the registry of the U.S. District Court for the District of Arizona to be distributed as follows:

  • $68 million to fund the consumer redress addressed in the class action settlement,

  • $32 million to remain in the registry to fund payments ordered by any state attorneys general. If no states lay claim to these funds they will revert to the FTC.

  • Legal and administrative costs will bump LifeLock's payout to $113 million

“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,” said FTC Chairwoman Edith Ramirez in a written statement. “The fact that consumers paid LifeLock for help in protecting their sensitive personal information makes the charges in this case particularly troubling.”

The FTC elected to approve the measure by a 3-1 vote with Commissioner Maureen K. Ohlhausen dissenting.

“The record lacks clear and convincing evidence that LifeLock failed to establish and maintain a comprehensive information security program designed to protect the security, confidentiality, and integrity of consumers' personal information,” she wrote in her dissension.

The settlement still requires the final approval by the district court judge.

The situation arose in 2010 when the FTC and 35 state attorney's general charged LifeLock with making deceptive claims regarding its identity theft protection services. In March 2010 LifeLock agreed to a $12 million settlement with almost one million LifeLock customers being entitled to refund checks under the agreement; however, in July 2015 the FTC had to take action against the company stating it had violated its 2010 agreement by continuing to to lie about its protection protocols and failing to adopt stricter security measures.

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