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Verizon to pay $7.4 million in FCC privacy settlement

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Agrees to monitor for future issues

Verizon has agreed to pay $7.4 million to settle an FCC investigation into a lapse in its consumer privacy protections, the commission announced this morning. The FCC found that for several years during the mid-2000s, Verizon had not properly informed some customers about their ability to opt out from having their information used in helping it tailor marketing campaigns. Information about opting out of this data collection has traditionally been included on either the first bill or a welcome letter from Verizon, but about 2 million customers did not receive the notice, which is required by the Communications Act.

"It is plainly unacceptable."

"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," Travis LeBlanc, acting chief of FCC’s Enforcement Bureau, says 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."

The long lapse in opt-out notices began in 2006 and continued for several years before being discovered in 2012. Verizon then failed to notify the FCC for another several months, when it should have reported the problem within five days. As part of the settlement, Verizon has agreed to several terms that are aimed at preventing this from happening in the future. For one, it's going to include opt-out notices on every bill for the next three years. Verizon will also set up a monitoring system to ensure that these notices are going out. As before, in the event that an error of any significance occurs, it'll be required to notify the FCC within five days.

"Verizon takes seriously its obligation to comply with all FCC rules," the company says in a statement, "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." Verizon notes that the issue did not involve a data breach or information being disclosed to third parties — but only that opt-out notices were not provided to some consumers before they were sent marketing material about various Verizon services.

Even if that doesn't sound dramatic, the FCC's response is still a strong sign that it won't tolerate lapses in consumer privacy. The $7.4 million figure alone — which is being paid to the Treasury — is said to be the largest sum in FCC history for a settlement related solely to the personal information of telephone customers.