AT&T Lawsuit Alleges Carrier Sold Customer Location Data To Third Parties

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AT&T can't catch a break. After being slapped with a lawsuit over additional charges on customer bills, Ma Bell is now being slapped with a lawsuit over selling customer location data to third parties. That's the claim of The Electronic Frontier Foundation (EFF) and Pierce Bainbridge Beck Price & Hecht, who have filed a lawsuit against Ma Bell for its data-selling practices that violated subscriber consent.

AT&T acted alongside of two data location-gathering companies, LocationSmart and Zumigo, to sell customer location information to third parties such as car dealerships, bounty hunters, landlords, stalkers, and even credit agencies without informing users they were doing so.

"The location data AT&T offered up for sale is extremely precise and can locate any of its wireless subscribers in real time, providing a window into the intimate details of their lives: where they go to the doctor, where they worship, where they live, and much more," said Pierce Bainbridge associate Abbye Klamann Ognibene. The lawsuit, if successful, would force AT&T, Zumigo, and LocationSmart to stop using customer data, return or destroy what remaining customer data they have, and to pay a large fine for money damages.

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AT&T responded to the lawsuit by saying that it doesn't sell customer data anymore. "The facts don't support this lawsuit, and we will fight it. Location-based services like roadside assistance, fraud protection, and medical device alerts have clear and even life-saving benefits. We only share location data with customer consent. We stopped sharing location data with aggregators after reports of misuse," an AT&T spokesperson told Digital Trends.

But the statement of the AT&T spokesperson is designed as something of a smokescreen from the real issue. First, yes, location-based services are beneficial to consumers, but their "life-saving benefits" don't make it okay for their location data to get tossed around by those who have access to it. In other words, when a company has such sensitive information, they are accountable for what they do with it.

AT&T may be the "mediator" between location-based services and their customers, but they are accountable for going the distance to ensure the privacy of their customers. AT&T is taking millions of dollars a year out of customers' pockets; when your hands are in the money that deep, you don't get to say, "I just let them use the services, I'm not responsible for those services and what they do because they have life-saving benefits."

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Next, the spokesperson's claim that "we only share location data with customer consent" sounds suspicious as well. If AT&T did an actual survey of their subscriber bases in each place where an AT&T store resides, they'd likely discover that some customers are unaware their location data is being shared with third parties.

It's common knowledge that carriers often "ram" customers through carrier agreements when they enroll for wireless service by putting so much in tiny print and getting them to "sign here, initial here, date here" to move the customer to agree to things that they might reconsider if given ample time to read over the carrier agreement. So, it's never the case that most individuals are okay with sharing their location data. Few would agree to it if they knew they were doing it against their consent.

AT&T says that they stopped sharing location data "after reports of misuse," but the issue is not just "sharing" location data, but also of "selling it." According to Digital Trends' own report on the matter, AT&T is getting money for the location data it gives away. It's not just a matter of sharing location data, which is bad enough, but of selling it.

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In the real world, every piece of information about you, including your phone number, social security number, email address, as well as your subscriber number, card number, license plate number, etc., is more than just a string of letters, numbers, or a combination of both; every piece of data is something valuable to third parties, who are willing to pay to have access to it.

And carriers like AT&T, with a treasure trove of user data, aren't going to sit around and guard it when they can give it away and make money. Remember, Ma Bell just found itself the target of a lawsuit last month behind charging extra fees on customer bills. Wherever AT&T can so much as sniff money, it'll do what it can to grab it, regardless of the moral question.