Verizon Agrees to Record $7.4 Million Settlement in Privacy Case

By Josh Long

Verizon has agreed to pay $7.4 million to the U.S. Treasury in what the Federal Communications Commission is calling the biggest settlement for resolving an investigation related to the privacy of phone subscribers’ personal information.

Beginning in 2006 and continuing for a number of years, Verizon failed to notify roughly 2 million customers of their privacy rights, including how to opt out from their personal information being used in marketing campaigns, the FCC announced today. 

Verizon didn’t discover the blunders until September 2012, and the FCC wasn’t notified until Jan. 18, 2013, the commission said. According to the consent decree entered into between the FCC and Verizon, Verizon was supposed to notify the FCC about the problems with the opt-out notification within five business days of discovering them.

“In today’s increasingly connected world, it is critical that every phone company honor its duty to inform customers of their privacy choices and then to respect those choices,” said Travis LeBlanc, acting chief of the FCC’s Enforcement Bureau, in a statement. “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.”

As part of the FCC settlement, Verizon has agreed to disclose to customers their opt-out rights on every bill for the next three years. Verizon also will implement systems to monitor and test its billing systems and opt-out notice process to verify subscribers are receiving proper notices of their privacy rights, the FCC said. Other than an “anomaly,” the company must report to the FCC any problems discovered within five business days, the commission 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,” a Verizon spokesman said. “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.”