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Verizon Will Have To Pay $7.4 Million To Settle Their FCC Investigation

September 3, 2014 - Written By Ray Greer

When a company uses a customers personal information for marketing purposes, they need to provide that customer with a way to opt out. In the case of Verizon Communications, the missing opt out option has resulted in a $7.4 million fine to be paid to the Federal Communications Commission (FCC). Carriers are allowed to use customers calling information or any other personal information provided to them to market better to that customer. However, in order to do so, they must gain consent from the customer before hand, or if the customer doesn’t want to give consent, the company must provide a way to opt out. Customers using Verizon’s home phone services may have found they had no way to opt out of these practices.

Earlier last year Verizon themselves discovered the malpractice in their services from 2006 to 2013. Verizon then reported the error to the FCC in order to remain in good standings. They reported that between 2006 and 2013, Verizon left out any way to opt out via notices for around 2 million customers. During that time, all of the customers mentioned were having their personal information used for marketing purposes. However, according to Verizon’s spokesman, Edward McFadden, “It did not involve a data breach or an unauthorized disclosure of customer information to third parties.” This means that the marketing campaigns launched around the personal information collected by Verizon were only for Verizon products or services. McFadden also noted that this was only for certain Verizon Wireline customers, not all customers across all of Verizon’s networks. Still, the FCC found it necessary to begin an investigation.

According to the FCC, Verizon did the right thing in informing them of this oversight, however it was several months too late. The FCC requires that a company informs them of any instances like this within 5 business days of finding the issue. Verizon waited several months before informing the FCC. Travis LeBlanc, the acting chief of the FCC’s Enforcement Bureau said, “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,” LeBlanc continued to say, “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 order to resolve the investigation, Verizon Communications Inc. has agreed to settle the dispute by paying a $7.4 million fine. Verizon has also promised that they will fix the issue, and add the ability to opt out of these practices on every invoice.