September 3, 2014
Following an investigation by the Federal Communications Commission regarding the use of customer information for marketing campaigns, Verizon has agreed to pay a settlement to the federal government. The FCC investigated allegations that Verizon used personal information without notifying customers or obtaining their consent. To end the investigation, Verizon will pay $7.4 million to the U.S. Treasury and notify its customers of their opt-out rights on every bill for the next three years.
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.
“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,” reports Technocrat.
“The settlement comes as the FCC is trying to look like it’s being tough on wireless phone companies,” suggests Wired. “In late July, the commission sent Verizon a strongly worded letter in which Chairman Tom Wheeler said he was ‘deeply troubled’ by Verizon’s decision to expand its network-management policy that targets customers of its unlimited data plans.”
Wheeler has recently been criticized by some politicians and consumer groups for bowing to major broadband companies.
“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,” explained a Verizon spokesman. “It did not involve a data breach or an unauthorized disclosure of customer information to third parties.”