Friday, March 12, 2010

Lifelock Fined 12 Million - What we can learn

The CEO of Lifelock, Todd Davis, became famous for advertising his Social Security number on television ads and billboards promising his $10 monthly service would protect consumers from identity theft.

The company also offered a $1 million guarantee to compensate customers for losses incurred if they became a victim of identity theft after signing up for the service.
But the Federal Trade Commission said Tuesday that the claims were bogus (http://www.wired.com/images_blogs/threatlevel/2010/03/lifelockcomplaint.pdf) and accused Lifelock, based in Arizona, of operating a scam and con operation. The commission announced, along with 35 state attorneys general, that it had levied a fine of $12 million against the company for deceptive business practices and for failing to secure sensitive customer data. Of that amount, $11 million will go to refund customers who subscribed to the service. Consumers will receive a letter from the FTC and their attorney general explaining how to take part in the settlement

http://www.wired.com/threatlevel/2010/03/lifelock-accused-of-running-con-operation
 
MIAOULIS NOTE:  This again points to the need for organizations to take their minimum necessary (reduce those folks who have access to the FULL SSN, complete Birthdate (Month and Year should be enough), etc.) and by implementing a FTC "Red Flag Program".

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