Verizon settles with FCC over missing privacy rights

Company neglected to inform customers of their right to opt out of marketing programs

After hackers leaked private images of Hollywood’s finest late last week, the conversation about privacy reached a fevered pitch. But while compromising selfies are likely to get the attention of the general public, a major settlement this week shines light on the penalties corporations can expect when they treat customer data in ways deemed inappropriate by authorities.

On Sept 5 the Federal Communication Commission (FCC) announced that it reached a settlement with Verizon, closing probes into the way the company handled its customer’s privacy rights. Verizon will pay $7.4 million.

The FCC’s investigation unit found that Verizon had failed to inform nearly 2 million new and returning customers of their privacy rights during their initial enrollment in 2012; the company also failed to notify the FCC of the failure to do so. In addition to not stating privacy rights, Verizon neglected to inform customers how to opt out of information sharing programs in which Verizon shares certain information with marketing companies.

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The omission of these details is a violation of the Communications Act. Verizon was brought to task over the issues, eventually settling with the FCC. The breadth of information available to phone companies makes them the prime target for this type of enforcement. Not only do marketing programs like this potentially offer contact information from customers, but increasingly smartphones can also give info on the location and shopping habits of their users.

“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.  “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.

In addition to the payment -- which is a modest sum for a company worth billions --  Verizon has agreed to include information on opting out of their information sharing programs on customer bills and welcome letters for the next three years. 

Executive Editor

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Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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