The Federal Trade Commission today announced that LifeLock has agreed to pay $100 million to settle charges that it had violated the terms of a 2010 order by the U.S. District Court for the District of Arizona, requiring LifeLock to secure customer data and change its advertising practices.
The FTC alleged, among other things, that LifeLock had failed to provide comprehensive security for its customers’ data, and falsely advertised that it protected consumers’ identities by providing alerts “as soon as” it received indications of a problem.
Under the settlement, $68 million may be used to pay consumers who were part of a class action against LifeLock, with the remaining funds being paid to the FTC for use in further consumer redress. The settlement also extends the time period for recordkeeping requirements that had been included in the initial agreement.
The settlement announced today dwarfs the $12 million settlement between LifeLock and the FTC and 35 state attorneys general in 2010 that resulted in the consent order that the FTC claimed was being violated.
The settlement is a reminder of the importance of compliance with agreements that settle regulatory enforcement actions, because regulators continue to monitor the behavior of businesses after agreements are reached. In addition, the settlement shows that despite a great deal of recent focus on the Consumer Financial Protection Bureau, the FTC remains a key player in consumer financial enforcement actions.