Verizon Agrees to Shell Out $7.4 Million to Settle Consumer Privacy Investigation

by Istvan Fekete on September 4, 2014

Verizon was fined $7.4 million by the US Treasury for violating its wireline phone customers’ privacy rights. According to the Federal Communications Commission’s press release issued yesterday, this is the “largest such payment in FCC history for settling an investigation related solely to privacy of telephone customers’ personal information.”

This fine isn’t much of a hit for Verizon’s finances, as the company made $31.5 billion in revenue in the second quarter of 2014.

As the FCC press release highlights, the regulator has found that Verizon failed to notify 2 million new residential and business customers of their privacy rights, “including how to opt out from having their personal information used in marketing campaigns, before the company accessed their personal information to market services to them,” the FCC said. This deprived customers “of their right to deny Verizon permission to access or use their personal information for certain marketing purposes.”

The whole story began in 2006 and continued for six years, until certain Verizon personnel discovered a potential opt-out problem. Verizon “failed to notify the FCC of these problems until January 18, 2013,” 126 days after the problem had been discovered, the FCC said. Verizon began sending additional opt-out notices to customers in March 2013.

The $7.4 million Verizon settlement almost matches the $7.5 million fine paid by Sprint to resolve an FCC investigation of the mobile wireless company’s failure to honour consumer requests to opt out of phone and text marketing communications. The settlement was announced earlier this year, in May.

The latter was the biggest Do-Not-Call settlement the FCC has ever reached. In addition to the $7.5 million fine, Sprint has agreed to implement a two-year plan to ensure compliance with FCC requirements, which is designed to protect privacy and prevent consumers from receiving unwanted telemarketing calls.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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