Arizona-Based LifeLock Announces Latest Settlement With FTC
Martha Strachan / New Times
Tempe-based LifeLock announced today that it reached a new agreement with the Federal Trade Commission over allegations that it violated terms of a 2010 settlement plan.
In 2010, the ethically challenged company was ordered to pay $12 million to the FTC for engaging in deceptive advertising. The company clawed back to success and ultimately went public, accruing about three million subscribers who pay a monthly fee for various ID-theft prevention measures of debated value. But in July, the FTC accused LifeLock of failing to keep its customers' personal data as secure as possible and of exaggerating the potential protective effects of its service. The company's stock plummeted to half its value and still hasn't recovered its previous momentum.
Today's announcement, if it's followed by confirmation from the FTC and depending on the terms of the agreement, could be the lift LifeLock's looking for. The company's revenue for the year's third quarter was $152 million, up 24 percent over the same period last year.
"The proposed FTC settlement does not require us to change our current products, services, or business and information security practices, including in particular, our current marketing and advertising practices," LifeLock states today on its website. "The agreements are not yet final, as the FTC staff’s recommendation to approve the settlement must still be approved by the Commission itself and a federal judge, and the class-action settlement will require review and approval by the court."
LifeLock didn't release actual terms of the settlement. FTC officials didn't immediately return phone calls.
LifeLock has prepared for a large settlement by building up $116 million in reserve funds, the company stated.
"We believe the agreements we announced today are in the best interest of our shareholders and represent a positive step toward achieving closure on substantial outstanding litigation against the company," Todd Davis, LifeLock's chairman and CEO, said in a written statement. These settlements, if approved, will enable all of us to focus on our mission of protecting our members.”
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