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Verizon To Pay $7.4M To Settle Privacy Investigation

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Released: September 3, 2014
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NEWS

Federal Communications Commission

News Media Information 202 / 418-0500

445 12th Street, S.W.

Internet: http://www.fcc.gov

Washington, D.C. 20554

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action.

See MCI v. FCC. 515 F 2d 385 (D.C. Cir. 1974).

FOR IMMEDIATE RELEASE:

NEWS MEDIA CONTACT:

September 3, 2014

Neil Grace, 202-418-0506

E-mail: neil.grace@fcc.gov

VERIZON TO PAY $7.4 MILLION TO SETTLE CONSUMER PRIVACY INVESTIGATION

Company Failed to Notify Approximately Two Million Customers of their Privacy Rights Prior to Conducting

Thousands of Marketing Campaigns; Agrees to Three-Year Compliance Plan

Washington, DC – The Federal Communications Commission’s Enforcement Bureau has reached a $7.4

million settlement with Verizon to resolve an investigation into the company’s use of personal consumer

information for marketing purposes. The Enforcement Bureau’s investigation uncovered that Verizon failed to

notify approximately two million new customers, on their first invoices or in welcome letters, 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.

In addition to the $7.4 million

payment, Verizon has agreed to notify customers of their opt-out rights on every bill for the next three years.

“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.”

Phone companies collect an array of sensitive personal information about their customers, like billing and

location data, and the Communications Act requires them to protect the privacy of that information. A phone

company is generally prohibited from accessing or using certain personal information except in limited

circumstances like marketing, but only after getting the customer’s approval. It can obtain approval through

either an “opt-in” or “opt-out” process. When that process is not working properly, the company must report

the problem to the FCC within five business days.

For many of its customers, Verizon has used an opt-out process, sending opt-out notices to customers either

as a message in their first bill or in a welcome letter. During its investigation, the Enforcement Bureau

learned that, beginning in 2006 and continuing for several years thereafter, Verizon failed to generate the

required opt-out notices to approximately two million customers, depriving them of their right to deny

Verizon permission to access or use their personal information for certain marketing purposes. Moreover, the

Enforcement Bureau learned that Verizon personnel failed to discover these problems until September 2012,

and the company failed to notify the FCC of these problems until January 18, 2013, 126 days later.

Under the terms of the Consent Decree the FCC announced today, Verizon must take significant steps to

improve how it protects the privacy rights of its customers. For example, Verizon will now include opt-out

notices on every bill, not just the first bill, and it will put systems in place to monitor and test its billing

systems and opt-out notice process to ensure that customers are receiving proper notices of their privacy

rights. Any problems detected that are more than an anomaly must be reported to the Commission within five

business days, and any noncompliance must be reported as well.

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To resolve the matter, Verizon will pay $7.4 million to the U.S. Treasury, which is the largest such payment

in FCC history for settling an investigation related solely to the privacy of telephone customers’ personal

information.

For more information about the FCC’s rules for ensuring the privacy of consumers’ CPNI, see the FCC

consumer guide, “Protecting Your Telephone Calling Records” available here:

http://www.fcc.gov/guides/protecting-your-telephone-calling-records. For information about other

communications issues, visit the FCC’s Consumer website, or contact the FCC’s Consumer Center by calling

1-888-CALL-FCC (1-888-225-5322) voice or 1-888-TELL-FCC (1-888-835-5322) TTY; faxing 1-866-418-

0232; or by writing to:

Federal Communications Commission

Consumer and Governmental Affairs Bureau

Consumer Inquiries and Complaints Division

445 12th Street, SW

Washington, DC 20554

The Order and Consent Decree are available at:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-14-

1251A1.pdf

-FCC-

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