FCC Issues Historic Privacy Fine to Verizon

By Adham McGuire,
Money and Investing Writer

Since 2006 Verizon Communications Inc. (NYSE: VZ) has not been forthright with its customers in regards to privacy. Starting in 2006 and continuing until September 2012 over two million Verizon customers were not made aware of their privacy options.

In particular the option to opt out of Verizon’s data collection program; which is used by the company’s market research unit.

The type of personal information Verizon collected is only supposed to be accessed if the consumer grants permission. In this situation there was a clear and blatant breach of customer privacy, but Verizon claims that it was a mistake.

According to CNN Money, Verizon also stated that the company, “did not involve a data breach or an unauthorized disclosure of customer information to third parties.”

Although the egregious mistake that Verizon made for all those years was not compounded by a data breach or the disclosure of personal consumer information to third parties, it is unacceptable.

The Federal Communications Commission was forced to take action and fine the New York based company 7.4 million dollars.

According to CNET, “This is the largest such payment the FCC has ever received in an investigation related solely to the privacy of telephone customers’ personal information.”

In addition, Verizon is also responsible for including the information required for customers to opt-out of the company’s data collection. It must be included on every bill for the next 3 years; typically that info is only printed on the first bill.

These are the steps that the FCC took in attempt to be tough; however, the organization’s words seemed stronger than the slap on the wrist fine that Verizon agreed to pay.

Tom Wheeler, the Chairman of the Federal Communications Commission, has been actively trying to bolster his image after his critics began to question his toughness pertaining to broadband companies.

After losing a case to Verizon on net neutrality (the principle that internet service providers must treat all internet traffic the same) earlier in the year, this investigation and punishment levied upon Verizon does show a stronger stand against phone companies.

Further investigation indicated that Verizon bypassed the FCC’s five day rule concerning violations, waiting 126 days before divulging their mistake. This entire case shows a great deal of strong words and a very serious lack of follow through. Chairman Wheeler stated that he was “deeply troubled” by Verizon’s actions, but the reprimand, although historic, was nothing more than a slap on the wrist.

Verizon’s statement ensured that the company complies with all FCC rules and attempted to downplay the privacy lapse by comparing it to the worst possible scenarios. The company’s statement and its actions paint a completely different picture.

The Chief of the FCC’s Enforcement Bureau, Travis LeBlanc gave an official statement that is extremely frank with Verizon’s blunder, “It is plainly unacceptable for any phone company to use its customers’ personal information for thousands of marketing campaigns without even giving them the choice to opt out.”

He highlights the problem, for over six years Verizon Communications Inc. failed to allow its customers to opt-out of its marketing practices.

Even with the stern statement given by the FCC the fine was not enough to truly safeguard consumers for the future. A future where privacy concerns will continue to mount.

A version of this article appeared in the Tuesday, Sept. 9 print edition.

Contact Adham at
adham.mcguire@student.shu.edu

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