FCC Issues Largest Ever Fine To Verizon For Hiding Ability To 'Opt-Out' Of Selling Customer Info To Marketers
from the still-a-slap-on-the-wrist dept
At issue was that Verizon is required to have either an opt-in system for sharing information on users with marketers or an opt-out system. But if they have an opt-out system, they have to clearly tell new customers that they can opt-out and how to do so. Not surprisingly, Verizon chose the "opt-out" method... and then conveniently left out the part where they tell customers they have the right to opt-out. And they did this for several years. To approximately two million customers. Oh, and to make matters worse, the company is required to let the FCC know of any violation within five business days of becoming aware of it. Verizon finally "noticed" it's own failure to tell people about the opt-out in September of 2012, but forgot to say anything to the FCC for... 126 days. That's a bit longer than five.
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. Under the terms of the Consent Decree the FCC announced today, Verizon must take significant steps to improve how it protects the privacy rights of its customers. For example, Verizon will now include opt-out notices on every bill, not just the first bill, and it will put systems in place to monitor and test its billing systems and opt-out notice process to ensure that customers are receiving proper notices of their privacy rights. Any problems detected that are more than an anomaly must be reported to the Commission within five business days, and any noncompliance must be reported as well.The fine is a slap on the wrist, but this once again suggests the rather cavalier attitude the telcos have concerning privacy and the ways in which they clearly are not particularly concerned about obeying FCC regulations.
To resolve the matter, Verizon will pay $7.4 million to the U.S. Treasury, which is the largest such payment in FCC history for settling an investigation related solely to the privacy of telephone customers’ personal information.