Verizon and FCC Settle Privacy Investigation for $7.4 Million
Posted at 12:39 p.m. on Sept. 3, 2014
Verizon has agreed to pay the federal government $7.4 million in a settlement over a Federal Communications Commission investigation of allegations that the company used customers’ personal information for marketing campaigns without notifying them or getting their consent, according to the commission.
The FCC says Verizon didn’t notify two million customers that they could opt out of the marketing program:
For many of its customers, Verizon has used an opt-out process, sending opt-out notices to customers either as a message in their first bill or in a welcome letter. During its investigation, the Enforcement Bureau learned that, beginning in 2006 and continuing for several years thereafter, Verizon failed to generate the required opt-out notices to approximately two million customers, depriving them of their right to deny Verizon permission to access or use their personal information for certain marketing purposes. Moreover, the Enforcement Bureau learned that Verizon personnel failed to discover these problems until September 2012, and the company failed to notify the FCC of these problems until January 18, 2013, 126 days later.
According to the consent decree, Verizon will pay $7.4 million to the U.S. Treasury and for the next three years will notify customers of their opt-out rights on every bill. The FCC, in turn, will end its investigation.
The agency says that the settlement amount is the largest in the agency’s history for an investigation exclusively having to do with privacy of personal information of phone customers.
Verizon spokesman Ed Mcfadden said, “The issue here was that a notice required by FCC rules inadvertently was not provided to certain of Verizon’s wireline customers before they received marketing materials from Verizon for other Verizon services that might be of interest to them. It did not involve a data breach or an unauthorized disclosure of customer information to third parties. Verizon takes seriously its obligation to comply with all FCC rules, and once we discovered the issue with the notices we informed the FCC, fixed the problem and implemented a number of measures to ensure it does not recur.”