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FTC accuses LifeLock of violating 2010 settlement

On July 21, the Federal Trade Commission announced that it is taking action against LifeLock for violating a 2010 settlement with the agency and the attorneys general of 35 states, including California. The FTC has asked the court to order the identity theft protection company to provide full redress to affected consumers across the country.

According to documents filed in the U.S. District Court for the District of Arizona, Lifelock has failed to uphold its obligations under a 2010 agreement that settled federal charges that the company made false claims regarding its identity protection services. Under the settlement, LifeLock was barred from making further false claims and required to more stringently safeguard the personal information it collects from its customers. The company was also ordered to pay $12 million in refunds to consumers in 35 states.

The FTC accuses LifeLock of failing to protect the personal data of its customers from at least October 2012 until March 2014. The agency also alleges LifeLock further participated in false advertising and failed to keep proper records as required by the 2010 settlement agreement. In a statement, the FTC said that it takes these steps when a company violates the agency's orders and continues to cause harm to consumers. The agency's action was filed under seal. It is up to the court which portions will be made public.

This case underscores the importance of understanding and following the terms of business contracts, including settlement agreements. Any company that is negotiating a settlement agreement or conducting business under the terms of such an agreement may wish to obtain the guidance of an attorney.

Source: FTC, "FTC Takes Action Against LifeLock for Alleged Violations of 2010 Order," July 21, 2015

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